UST GN 2011 - Labor Law Proper

FUNDAMENTAL PRINCIPLES AND POLICIES LABOR LAW Q: What is labor? A: It is the exertion by human beings of physical or mental efforts, or both, towards the production of goods and services. Q: What is labor law? A: The law governing the rights and duties of the employer and employees with respect to: 1. The terms and conditions of employment and 2. Labor disputes arising from collective bargaining (CB) respecting such terms and conditions. Q: What is the purpose of labor legislation? A: Labor legislation is an exercise of police power. The purpose of labor legislation is to regulate the relations between employers (Ers) and employees (Ees) respecting the terms and conditions of employment, either by providing for certain standards or for a legal framework within which better terms and conditions of work could be negotiated through CB. It is intended to correct the injustices inherent in Er‐Ee relationship. (2006 Bar Question) Q: What are the classifications of labor law? A: 1. Labor standards – The minimum terms and conditions of employment prescribed by existing laws, rules and regulations relating to wages, hours of work, cost‐of‐ living allowance and other monetary and welfare benefits. (Batong Buhay Gold Mines, Inc. v. Dela Serna, G.R. No. 86963, August 6,1999) th e.g. 13 month pay 2. Labor relations – Defines and regulates the status, rights and duties, and the institutional mechanisms, that govern the individual and collective interactions of Ers, Ees, or their representatives. It is concerned with the stabilization of relations of Er and Ees and seek to forestall and adjust the differences between them by the encouragement of collective bargaining and the settlement of labor disputes through conciliation, mediation and arbitration. e.g. Additional allowance pursuant to CBA

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Social legislation – It includes laws that provide particular kinds of protection or benefits to society or segments thereof in furtherance of social justice. e.g. GSIS Law, SSS Law, Philhealth benefits

Q: Is there any distinction between labor legislation and social legislation? Explain. A: Labor legislation is sometimes distinguished from social legislation by the former referring to labor statutes, like Labor Relations Law and Labor Standards, and the latter to Social Security Laws. Labor legislation focuses on the rights of the worker in the workplace. Social legislation is a broad term and may include not only laws that give social security protection, but also those that help the worker secure housing and basic necessities. The Comprehensive Agrarian Reform Law could also be considered a social legislation. All labor laws are social legislation, but not all social legislation is labor law. (1994 Bar Question) Q: What are the sources of labor laws? A: 1. Labor Code and other related special legislation 2. Contract 3. Collective Bargaining Agreement 4. Past practices 5. Company policies A. FUNDAMENTAL PRINCIPLES AND POLICIES 1.CONSTITUTIONAL PROVISIONS Q: What are the constitutional mandates with regard labor laws? A: 1. Sec. 3, Art. XIII – The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. It shall guarantee the rights of all workers to self‐organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision‐making processes affecting their

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ACADEMICS CHAIR: LESTER JAY ALAN E. FLORES II U N I V E R S I T Y O F S A N T O T O M A S VICE CHAIRS FOR ACADEMICS: KAREN JOY G. SABUGO & JOHN HENRY C. MENDOZA Facultad de Derecho Civil VICE CHAIR FOR ADMINISTRATION AND FINANCE: JEANELLE C. LEE VICE CHAIRS FOR LAY‐OUT AND DESIGN: EARL LOUIE M. MASACAYAN & THEENA C. MARTINEZ

UST GOLDEN NOTES 2011 rights and benefits as may be provided by law. The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace. The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns to investments, and to expansion and growth. 2.

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11. Sec. 9, Art. II – The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living, and an improved quality of life for all. Sec. 10, Art II ‐ The State shall promote social justice in all phases of national development. Sec. 11, Art II ‐ The State values the dignity of every human person and guarantees full respect for human rights. Sec. 13, Art. II ‐ The State recognizes the vital role of the youth in nation‐building and shall promote and protect their physical, moral, spiritual, intellectual, and social well‐being. It shall inculcate in the youth patriotism and nationalism, and encourage their involvement in public and civic affairs. Sec. 14, Art. II ‐ The State recognizes the role of women in nation‐building, and shall ensure the fundamental equality before the law of women and men. Sec. 18, Art. II – The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare. Sec. 20, Art. II ‐ The State recognizes the indispensable role of the private sector, encourages private enterprise, and

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provides incentives to needed investments. Sec. 1, Art. III ‐ No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws. Sec. 4, Art. III ‐ No law shall be passed abridging the freedom of speech, of expression, or of the press, or the right of the people peaceably to assemble and petition the government for redress of grievances. Sec. 8, Art. III – The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged. Sec. 1, Art. XIII ‐ The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good. To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments. Sec. 2, Art. XIII ‐ The promotion of social justice shall include the commitment to create economic opportunities based on freedom of initiative and self‐reliance. Sec. 14, Art. XIII – The State shall protect working women by providing safe and healthful working conditions, taking into account their maternal functions, and such facilities and opportunities that will enhance their welfare and enable them to realize their full potential in the service of the nation.

Q: What is the State policy on labor as found in the constitution (Sec. 3, Art. XIII)? A: 1. Afford full protection to labor 2. Promote full employment 3. Ensure equal work opportunities regardless of sex, race, or creed

LABOR LAW TEAM: ADVISER: ATTY. JOEVEN D. DELLOSA; SUBJECT HEAD: ANGELO S. DIOKNO; ASST. SUBJECT HEADS: KAREN SABUGO, GENESIS R. FULGENCIO MEMBERS: PALMA CLARISSA V. CARILLO, RANDOLPH IAN CLET, MICHAEL AARON P. GACUTAN, LORRAINE TAGUIAM

FUNDAMENTAL PRINCIPLES AND POLICIES 4.

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Assure the rights of workers to self organization, security of tenure, just and humane conditions of work, participate in policy and decision‐making processes affecting their right and benefits Regulate the relations between workers and employers

Q: What are the basic rights of workers guaranteed by the Constitution (Sec. 3, Art. XIII)? A: 1. Security of tenure 2. Receive a living wage 3. Humane working conditions 4. Share in the fruits of production 5. Organize themselves 6. Conduct collective bargaining or negotiation with management 7. Engage in peaceful concerted activities including strike 8. Participate in policy and decision making processes Q: What is the principle of non‐oppression? A: The principle mandates capital and labor not to act oppressively against each other or impair the interest and convenience of the public. The protection to labor clause in the Constitution is not designed to oppress or destroy capital. (Capili v. NLRC, G.R. No. 117378, Mar. 26, 1997) 2.NEW CIVIL CODE AND OTHER LAWS Q: What are other related laws to labor? A: 1. Civil Code a. Art. 1700 – The relations between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good. Therefore, such contracts are subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects. b. Art. 1701 – Neither capital nor labor shall act oppressively against the other, or impair the interest or convenience of the public. c. Art. 1702 – In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the

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safety and decent living for the laborer. d. Art. 1703 – No contract which practically amounts to involuntary servitude, under any guise whatsoever, shall be valid. Revised Penal Code Art. 289 – Formation, maintenance and prohibition of combination of capital or labor through violence or threats. – Any person who, for the purpose of organizing, maintaining or preventing coalitions or capital or labor, strike of laborers or lock‐out of employees, shall employ violence or threats in such a degree as to compel or force the laborers or employers in the free and legal exercise of their industry or work, if the act shall not constitute a more serious offense in accordance with the provisions of the RPC. Special Laws a. GSIS Law th b. 13 Month Pay Law c. Retirement Pay Law d. SSS Law e. Paternity Leave Act f. Anti – Child Labor Act g. Anti – Sexual Harassment Act h. Magna Carta for Public Health Workers i. Solo Parents Welfare Act of 2000 j. National Health Insurance Act as amended by R.A. 9241 k. Migrant Workers and Overseas Filipinos Act of 1995 as amended by RA 10022 l. PERA Act of 2008 m. Home Development Mutual Fund Law of 2009 n. The Magna Carta of Women o. Comprehensive Agrarian Reform Law as amended by R.A. 9700

3.LABOR CODE Q: What is the aim of labor laws? A: The justification of labor laws is social justice. Social justice is “neither communism, nor despotism, nor atomism, nor anarchy,” but the humanization of laws and the equalization of social and economic force by the State so that justice in its rational and objectively secular conception may at least be approximated. Social justice means the promotion of the welfare of all the people, the

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UST GOLDEN NOTES 2011 adoption by the government of measures calculated to insure economic stability of all the competent elements of society, through the maintenance of a proper economic and social equilibrium in the interrelations of the members of the community, constitutionally, through the adoption of measures legally justifiable, or extra‐ constitutionally, through the exercise of powers underlying the existence of all governments on the time‐honored principle of salus populi est suprema lex. (Calalang v. Williams, G.R. No. 47800, Dec. 2, 1940) Q: What is “compassionate justice”? A: It is disregarding rigid rules and giving due weight to all equities of the case. e.g: Employee validly dismissed may still be given severance pay. Q: How should doubts in the implementation and interpretation of the Labor Code (LC) and its Implementing Rules and Regulations (IRR) be resolved? A: They should be resolved in favor of labor. Q: What is the concept of liberal approach in interpreting the LC and its IRR? A: The workers' welfare should be the paramount consideration in interpreting the LC and its IRR. This is rooted in the constitutional mandate to afford full protection to labor. (PLDT v. NLRC, G.R. No. 111933, July 23, 1997). It underscores the policy of social justice to accommodate the interests of the working class on the humane justification that those who have less in life shall have more in law. (PAL v. Santos, G.R. No. 77875, Feb. 4, 1993). (2006 Bar Question) Q: Art. 4 of the LC provides that in case of doubt in the implementation and interpretation of the provisions of the LC and its IRR, the doubt shall be resolved in favor of labor. Art. 1702 of the Civil Code also provides that in case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living of the laborer. Mica‐Mara Company assails the validity of these statutes on the ground that they violate its constitutional right to equal protection of the laws. Is the contention of Mica Mara Company tenable? Discuss fully.

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A: No, the Constitution provides that the State shall afford full protection to labor. Furthermore, the State affirms labor as a primary economic force. It shall protect the rights of workers and promote their welfare. (1998 Bar Question) a.Art. 3. Declaration of Basic Policy Q: What is the policy of the State as regards labor as found in the Labor Code (Art. 12)? A: 1. Promote and maintain a State of full employment through improved manpower training, allocation and utilization; 2. Protect every citizen desiring to work locally or overseas by securing for him the best possible terms and conditions of employment; 3. Facilitate a free choice of available employment by persons seeking work in conformity with the national interest; 4. Facilitate and regulate the movement of workers in conformity with the national interest; 5. Regulate the employment of aliens, including the establishment of a registration and/or work permit system; 6. Strengthen the network of public employment offices and rationalize the participation of the private sector in the recruitment and placement of workers, locally and overseas, to serve national development objectives; 7. Ensure careful selection of Filipino workers for overseas employment in order to protect the good name of the Philippines abroad. Q: What are the reasons for affording greater protection to employees? A: 1. Greater supply than demand for labor; and 2. Need for employment by labor comes from vital and desperate necessity. (Sanchez v. Harry Lyons Construction Inc., G.R. L‐2779, Oct. 18, 1950) Q: Are all labor disputes resolved in favor of labor? A: No. The law also recognizes that management has rights which are also entitled to respect and enforcement in the interest of fair play. (St. Lukes Medical Center Ees Ass’n v. NLRC, G.R. No. 162053, Mar. 7, 2007)


FUNDAMENTAL PRINCIPLES AND POLICIES

1. b.Art. 5. Rules and Regulations

Q: Who is given the “rule‐making power”? A: The Department of Labor and other gov’t agencies charged with the administration and enforcement of the Labor Code or any of its parts shall promulgate the necessary implementing rules and regulations. Such rules and regulations shall become effective 15 days after announcement of their adoption in newspapers of general circulation. Q: What are the limitations to the “rule‐making power” given to the Secretary of Labor and Employment and other gov’t agencies? A: It must: 1. Be issued under the authority of the law 2. Not be contrary to law and the Constitution c.Art. 6. Applicability Q: To whom shall all rights and benefits under the LC apply? A: GR: All rights and benefits granted to workers under the LC shall apply alike to all workers, whether agricultural or non‐agricultural. XPN: 1. Government employees (Ees) 2. Ees of government corporations created by special or original charter 3. Foreign governments 4. International agencies 5. Corporate officers/ intra‐corporate disputes which fall under P.D. 902‐A and now fall under the jurisdiction of the regular courts pursuant to the Securities Regulation Code (SRC). 6. Local water district except where NLRC’s jurisdiction is invoked. 7. As may otherwise be provided by the LC Q: What is the test in determining whether a GOCC is subject to the Civil Service Law? A: It is determined by the manner of their creation. Gov’t corporations that are created by special (original) charter from Congress are subject to Civil Service rules, while those incorporated under the General Corporation Law are covered by the LC. Q: Who is an agricultural/farm worker? A:

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One employed in an agricultural or farm enterprise, Performs tasks which are directly related to agricultural activities of the Er, and Any activities performed by a farmer as an incident to farming operations.

d.Art. 211. Declaration of Policy Q: What are the policy objectives of our labor relations law? A: The state aims to promote: 1. Free collective bargaining (CB) and negotiations, including voluntary arbitration, mediation and conciliation as modes of settling labor or industrial disputes; 2. Free trade unionism; 3. Free and voluntary organization of a strong and united labor movement; 4. Enlightenment of workers concerning their rights and obligations as union members and as Ees; 5. Adequate administrative machinery for the expeditious settlement of labor or industrial disputes; 6. Stable but dynamic and just industrial peace; 7. Participation of workers in the decision‐ making processes affecting their rights, duties and welfare; 8. Truly democratic method of regulating the relations between the Ers and Ees by means of agreements freely entered into through CB, no court or administrative agency or official shall have the power to set or fix wages, rates of pay, hours of work or other terms and conditions of employment, except as otherwise provided under the LC. e.Art. 212. Definitions Q: Who is an employer (Er)? A: Any person acting in the interest of an Er, directly or indirectly. The term does not include a labor organization (LO) or any of its officers and agents, except when acting as an Er. (Art.212[e]) An Er is defined as any person or entity that employs the services of others; one for whom work and who pays their wages of salaries; any person acting in the interest of an Er; refers to the enterprise where the LO operates or seeks to operate. (Sec.1[s], Rule I, Book V, IRR) Q: When is a labor organization deemed an Er?

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UST GOLDEN NOTES 2011 or representation of persons negotiating, fixing, maintaining changing terms or conditions employment.

A: When it is acting as such in relation to persons rendering services under hire, particularly in connection with its activities for profit or gain. Note: The mere fact that respondent is a labor union does not mean that it cannot be considered an Er for persons who work for it. Much less should it be exempted from labor laws. (Bautista v. Inciong, G.R. No. L‐52824, Mar. 16, 1988)

Q: What are the kinds of labor disputes? A: 1.

Q: Who is an employee (Ee)? A: 1. 2.

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Any person in the employ of the Er Any individual whose work has ceased as a result of or in connection with any current labor dispute or because of any unfair labor practice if he has not obtained any other substantially equivalent and regular employment One who has been dismissed from work but the legality of dismissal is being contested in a forum of appropriate jurisdiction. (D.O. No. 40‐03, Mar. 15, 2003)

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Note: The term shall not be limited to the Ees of a particular Er unless the LC explicitly states. Any Ee, whether employed for a definite period or not, shall, beginning on the first day of service, be considered an Ee for purposes of membership in any labor union. (Art. 277[c], LC)

Q: What is a labor dispute? A: Includes any controversy or matter concerning: 1. 2.

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Terms and conditions of employment, or The association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment Regardless of whether the disputants stand in the proximate relation of Er and Ee. (Art.212[l])

Q: What are the tests on whether a controversy falls within the definition of a labor dispute? A: 1.

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As to nature – It depends on whether the dispute arises from Er‐Ee relationship, although disputants need not be proximately “Er” or “Ee” of another. As to subject matter – The test depends on whether it concerns terms or conditions of employment or association

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Labor standard disputes a. Compensation – E.g. Underpayment of minimum wage; stringent output quota; illegal pay deductions b. Benefits – E.g. Non‐payment of holiday pay, OT pay or other benefits c. Working Conditions – E.g. Unrectified work hazards Labor relations disputes a. Organizational right disputes/ULP – E.g. Coercion, restraint or interference in unionization efforts; reprisal or discrimination due to union activities; company unionism; ULP, strike or lockout; union members’ complaint against union officers b. Representation disputes – E.g. Uncertainty as to which is the majority union; determination of appropriate CB unit; contests for recognition by different sets of officers in the same union c. Bargaining disputes – E.g. Refusal to bargain; bargaining in bad faith; bargaining deadlock; economic strike or lockout d. Contract administration or personnel policy disputes – E.g. Non‐ compliance with CBA provision (ULP if gross non compliance with economic provisions); disregard of grievance machinery; non observance of unwarranted use of union security clause; illegal or unreasonable personnel management policies; violation of no‐strike/no‐lockout agreement e. Employment tenure disputes – E.g. Non‐regularization of Ees; non‐ absorption of labor only contracting staff; illegal termination; non‐ issuance of employment contract

Q: Who are the parties to a dispute?


FUNDAMENTAL PRINCIPLES AND POLICIES A: 1. 2.

Primary parties are the Er, Ees and the union. Secondary parties are the voluntary arbitrator, agencies of DOLE, NLRC, Secretary of Labor and the Office of the President.

Q: What is an inter‐union dispute? A: Any conflict between and among legitimate labor unions involving representation questions for the purposes of CB or to any other conflict or dispute between legitimate labor unions. Q: What is an intra‐union dispute? A: Any conflict between and among union members, grievances arising from any violation of the rights and conditions of membership, violation of or disagreement over any provision of the union’s constitution and by‐laws, or disputes from chartering or affiliation of union. Q: What are rights disputes? A: They are claims for violations of a specific right arising from a contract, i.e. CBA or company policies. Q: What are interest disputes? A: They involve questions on “what should be included in the CBA”. Strictly speaking, the parties may choose a voluntary arbitrator to decide on the terms and conditions of employment, but this is impracticable because it will be a value judgment of the arbitrators and not of the parties. Q: What are contract–negotiation disputes? A: These are disputes as to the terms of the CBA. Q: What are contract–interpretation disputes? A: These are disputes arising under an existing CBA, involving such matters as the interpretation and application of the contract, or alleged violation of its provisions. f.Art. 255. Exclusive Bargaining Representation (EBR) and Worker’s Participation in Policy and Decision Making Q: Who shall be the bargaining representative of the Employees for purposes of collective bargaining?

A: The Labor Organization designated or selected by the majority of the employees in an appropriate collective bargaining unit shall be the exclusive representative of the employees in such unit for the purpose of collective bargaining. However, an individual employee or group of employees shall have the right at any time to present grievances to their employer. (As amended by Sec. 22, R.A. No. 6715, Mar. 15, 1989) Q: What is the extent of the worker’s right to participate in policy and decision‐making processes in a company? A: Such right refers not only to formulation of corporate programs and policies but also to participation in grievance procedures and voluntary modes of settling disputes. Q: Explain the extent of the workers’ right to participate in policy and decision‐making process as provided under Art. XIII, Sec. 13 of the 1987 Constitution. Does it include membership in the Board of Directors of a corporation? A: No. In Manila Electric Company v. Quisumbing, G.R. No. 127598, January 27, 1999, the SC recognized the right of the union to participate in policy formulation and decision making process on matters affecting the Union members’ rights, duties and welfare. However, the SC held that such participation of the union in committees of Er Meralco is not in the nature of a co‐management control of the business of Meralco. Impliedly, therefore, workers’ participatory right in policy and decision‐making processes does not include the right to put a union member in the Corporation’s Board of Directors. (2008 Bar Question) Q: May an Er solicit questions, suggestions and complaints from Ees even though the Ees are represented by a union? A: Yes, provided: 1. The CB representative executes an agreement waiving the right to be present on any occasion when Ee grievances are being adjusted by the Er; and 2. Er acts strictly within the terms of his waiver agreement. Q: The hotel union filed a Notice of Strike with the NCMB due to ULP against the Diamond Hotel who refused to bargain with it. The hotel advised the union that since it was not certified by the DOLE as the exclusive bargaining agent, it could not be

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UST GOLDEN NOTES 2011 recognized as such. Whether the Union may bargain collectively? A: No. Art. 255 of the LC declares that only the labor organization designated or selected by the majority of the Ees in an appropriate collective bargaining (CB) unit is the exclusive representative of the employees (Ees) in such unit for the purpose of CB. The union is admittedly not the exclusive representative of the majority of the Ees of the hotel, hence, it could not demand from the hotel the right to bargain collectively in their behalf. (Manila Diamond Hotel v. Manila Diamond Hotel Ees Union, G.R. No. 158075, June 30, 2006) Q: Are probationary Ees allowed to vote at the time of the certification elections? A: Yes. Under Art. 255 of the LC the “labor organization designated or selected by the majority of the Ees in an appropriate bargaining unit shall be the exclusive representative of the Ees in such unit for purposes of CB.” CB covers all aspects of the employment relation and the resultant CBA negotiated by the certified union binds all Ees in the bargaining unit. Hence, all rank and file Ees, probationary or permanent, have a substantial interest in the selection of the bargaining representative. The LC makes no distinction as to their employment status as basis for eligibility in supporting the petition for certification election. The law refers to "all" the Ees in the bargaining unit. All they need to be eligible to support the petition is to belong to the "bargaining unit." The provision in the CBA disqualifying probationary Ees from voting cannot override the constitutionally‐protected right of workers to self‐organization, as well as the provisions of the LC and its implementing rules on certification elections and jurisprudence. A law is read into, and forms part of, a contract. Provisions in a contract are valid only if they are not contrary to law, morals, good customs, public order or public policy. (NUWHRAIN‐MPHC v. SLE, G.R. No. 181531, July 31, 2009)

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RECRUITMENT AND PLACEMENT B.

RECRUITMENT AND PLACEMENT 1. RECRUITMENT OF LOCAL AND MIGRANT WORKERS a.Recruitment and Placement Q: Who is a worker? A: Any member of the labor force, whether employed or unemployed. (Art. 13 [a], LC) Q: What is recruitment and placement? A: 1. Any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers; and 2. Includes referrals, contact services, promising or advertising for employment, locally or abroad, whether for profit or not. (Art. 13 [b],LC) Q: What are the essential elements in determining whether one is engaged in recruitment/placement? A: It must be shown that: 1. The accused gave the complainant the distinct impression that she had the power or ability to send the complainant for work, 2. Such that the latter was convinced to part with his money in order to be so employed. (People v. Goce, G.R. No. 113161, Aug. 29, 1995) Q: Who is deemed engaged in recruitment and placement? A: Any person or entity which, in any manner, offers or promises for a fee employment to 2 or more persons. (Art. 13[b], LC) Q: What is the rule in recruitment and placement? A: GR: No person or entity other than the public employment offices, shall engage in the recruitment and placement of workers XPN: 1. Construction contractors if authorized by the DOLE and Construction Industry Authority 2. Other persons or entities as may be authorized by the SLE

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Members of the diplomatic corps (but hiring must go through POEA) Public employment offices Private recruitment offices Private employment agencies POEA Shipping or manning agents or representatives Name hires

9. Q: Who are name hires? A: They are individual workers who are able to secure contracts for overseas employment on their own efforts and representations without the assistance or participation of any agency. Their hiring, nonetheless, shall pass through the POEA for processing purposes. (Part III, Rule III, POEA Rules Governing Overseas Employment as amended in 2002) Q: What if employment is offered to only one person? A: Immaterial. The number of persons dealt with is not an essential ingredient of the act of recruitment and placement of workers. The proviso merely lays down a rule of evidence that where a fee is collected in consideration of a promise or offer of employment to 2 or more prospective workers, the individual or entity dealing with them shall be deemed to be engaged in the act of recruitment and placement. The words "shall be deemed" create that presumption. (People v. Panis, G.R. L‐ 58674‐77, July 11, 1986) Q: What is a private employment agency? A: Any person or entity engaged in the recruitment and placement of workers for a fee which is charged, directly or indirectly, from the workers or employers or both. Q: What is a private recruitment agency? A: It is any person or association engaged in the recruitment and placement of workers without charging any fee, directly or indirectly, from the workers or employers. Q: Who is a seaman? A: Any person employed in a vessel engaged in maritime navigation. Q: What is overseas employment?

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UST GOLDEN NOTES 2011 A: It is employment of a worker outside the Philippines. Q: Who is an overseas Filipino worker (OFW)? A: A person who is to be engaged, is engaged or has been engaged in a remunerated activity in a State of which he or she is not a citizen or on board a vessel navigating the foreign seas other than a government ship used for military or non‐ commercial purposes or on an installation located offshore or on the high seas; to be used interchangeably with migrant worker. (Sec.2, R.A. 10022 amending R.A. 8042) Q: Who is an emigrant? A: Any person, worker or otherwise, who emigrates to a foreign country by virtue of an immigrant visa or resident permit or its equivalent in the country of destination. b.Illegal Recruitment, Art. 38 (Local), Sec. 6, Migrant Workers Act, RA 8042 (a)License v. Authority Q: What is a license? A: It is issued by DOLE authorizing a person or entity to operate a private employment agency. Q: What is an Authority? A: It is a document issued by the DOLE authorizing a person or association to engage in recruitment and placement activities as a private recruitment entity. Q: Who is a non‐licensee / non‐holder of authority? A: Any person, corporation or entity: 1. Which has not been issued a valid license or authority to engage in recruitment and placement by the Secretary of Labor and Employment (SLE) or 2. Whose license or authority has been suspended, revoked or cancelled by the POEA or the SLE Q: What are the grounds for revocation of license? A: 1. Incurring an accumulated 3 counts of suspension by an agency based on final

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and executory orders within the period of validity of its license 2. Violations of the conditions of license 3. Engaging in acts of misrepresentation for the purpose of securing a license or renewal 4. Engaging in the recruitment or placement of workers to jobs harmful to the public health or morality or to the dignity of the country. (Sec. 3, Rule I, Book VI, Rules and Regulations Governing Overseas Employment) Q: What are the grounds for suspension or cancellation of license? A: 1. Prohibited acts under Art. 34 2. Publishing job announcements w/o POEA’s approval 3. Charging a fee which may be in excess of the authorized amount before a worker is employed 4. Deploying workers w/o processing through POEA 5. Recruitment in places outside its authorized area. (Sec. 4, Rule II, Book IV, POEA Rules) Q: Is the license or authority transferable? A: No, they are non‐transferable. (Art. 29) Q: A Recruitment and Placement Agency declared voluntary bankruptcy. Among its assets is its license to engage in business. Is the license of the bankrupt agency an asset which can be sold in public auction by the liquidator? A: No, because of the non‐transferability of the license to engage in recruitment and placement. The LC (Art. 29) provides that no license to engage in recruitment and placement shall be used directly or indirectly by any person other than the one in whose favor it was issued nor may such license be transferred, conveyed or assigned to any other person or entity. It may be noted that the grant of a license is a governmental act by the DOLE based on personal qualifications, and citizenship and capitalization requirements. (Arts.27‐28, LC). (1998 Bar Question) Note: Change of ownership or relationship of a single proprietorship licensed to engage in overseas employment shall cause the automatic revocation of the license.

Q: Concerned Filipino contract workers in the Middle East reported to the DFA that XYZ, a


RECRUITMENT AND PLACEMENT private recruitment and placement agency, is covertly transporting extremists to terrorist training camps abroad. Intelligence agencies of the gov’t allegedly confirmed the report. Upon being alerted by the DFA, the DOLE issued orders cancelling the licenses of XYZ, and imposing an immediate travel ban on its recruits for the Middle East. XYZ appealed to the Office of the President to reverse and set aside the DOLE orders, citing damages from loss of employment of its recruits, and violations of due process including lack of notice and hearing by DOLE. The DOLE in its answer claimed the existence of an emergency in the Middle East which required prompt measures to protect the life and limb of OFWs from a clear and present danger posed by the ongoing war against terrorism. Should the DOLE orders be upheld or set aside? A: 1. The DOLE order cancelling the licenses of XYZ is void because a report that an agency is covertly transporting extremists is not a valid ground for cancellation of a Certificate of Registration (Art. 239, LC and there is failure of due process as no hearing was conducted prior to the cancellation (Art. 238, LC). 2. The DOLE order imposing the travel ban is valid because it is a valid exercise of police power to protect the national interest (Sec. 3, Art. XIII, Constitution on full protection to labor safety of workers) and on the rule making authority of the SLE. (Art. 5, LC; Phil. Ass’n. of Service Exporters v. Drilon, G.R. No. 81958, June 30, 1988). (2004 Bar Question) Q: Who are the persons prohibited from engaging the business of recruiting migrant workers? A: 1. Unlawful for any official or Ee of the: a. DOLE b. POEA c. Overseas Workers Welfare Administration (OWWA) d. DFA e. Other gov’t agencies involved in the implementation of this Act th 2. Their relatives within the 4 civil degree of consanguinity or affinity, to engage, directly or indirectly in the business of recruiting migrant workers. (Sec. 8, R.A. 8042)

(b)Illegal Recruitment Q: What are the elements of Illegal Recruitment? A: 1. Offender is a non‐licensee or non‐holder of authority to lawfully engage in the recruitment/placement of workers 2. Offender undertakes: a. Any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contact services, promising or advertising for employment, locally or abroad, whether for profit or not (Art. 13[b]); or b. Any of prohibited practices under Art. 34 Q: When is there Simple Illegal Recruitment? A: It is considered simple illegal recruitment when it involves less than three (3) victims or recruiters. Q: Larry Domingo was accused of the crime of illegal recruitment. He argued that he issued no receipt or document in which he acknowledged as having received any money for the promised jobs. Hence, he should be free him from liability. Was Larry engaged in recruitment activities? A: Yes. Even if at the time Larry was promising employment no cash was given to him, he is still considered as having been engaged in recruitment activities, since Art.13(b) of the LC states that the act of recruitment may be for profit or not. It suffices that Larry promised or offered employment for a fee to the complaining witnesses to warrant his conviction for illegal recruitment. (People v. Domingo, G.R. No. 181475, April 7, 2009, J. Carpio‐ Morales) Q: What is the difference between the LC and R.A. 8042 or the Overseas Filipinos and Overseas Migrant Workers Act? A: LC (Art. 38)

R.A. 8042, as amended by RA 10022

Local recruitment

Applies to recruitment for overseas employment

Illegal recruitment under Art. 38 means any recruitment activity including prohibited acts under Art. 34 committed by non‐

Illegal recruitment under Sec. 6 means any recruitment activity committed by non‐licensees/ non‐holders of authority or prohibited acts (same as Art. 34, LC)

11


UST GOLDEN NOTES 2011 licensees or non‐ holders of authority.

Added to the following in the list of prohibited acts: 1. Failure to actually deploy without valid reason; 2. Failure to reimburse expenses incurred by the worker in connection with his/her documentation and processing for purposes of deployment; 3. To allow a non‐Filipino citizen to head or manage a licensed recruitment/ manning agency.

Q: How does one prove illegal recruitment? A: It must be shown that the accused gave the distinct impression that he had the power or ability to send complainants abroad for work such that the latter were convinced to part with their money in order to be deployed. Q: May a licensee or holder of authority be held liable for illegal recruitment? A: Yes, any person (whether non‐licensee, non‐ holder of authority, licensee or holder of authority) who commits any of the prohibited acts, shall be liable for Illegal recruitment. (R.A. 8042) Q: When is illegal recruitment considered as economic sabotage? A: When it is committed: 1. By a syndicate – carried out by 3 or more persons conspiring/confederating with one another or 2. In large scale – committed against 3 or more persons individually or as a group. (Sec. 6, 10022) Q: While her application for renewal of her license to recruit workers for overseas employment was still pending Maryrose Ganda recruited Alma and her 3 sisters, Ana, Joan, and Mavic, for employment as housemates in Saudi Arabia. Maryrose represented to the sisters that she had a license to recruit workers for overseas employment and demanded and received P30,000.00 from each of them for her services. However, her application for the renewal of her license was denied, and consequently failed to employ the 4 sisters in Saudi Arabia. The sisters charged Maryrose with large scale illegal recruitment. Testifying in her defense, she declared that she acted in good faith because she

12

believed that her application for the renewal of her license would be approved. She adduced in evidence the Affidavits of Desistance which the four private complainants had executed after the prosecution rested its case. In the said affidavits, they acknowledge receipt of the refund by Maryrose of the total amount of P120,000.00 and indicated that they were no longer interested to pursue the case against her. Resolve the case with reasons. A: Illegal recruitment is defined by law as any recruitment activities undertaken by non‐licenses or non‐holders of authority. (People v. Senoron, G.R. No. 119160, Jan. 30,1997) And it is large scale illegal recruitment when the offense is committed against 3 or more persons, individually or as a group. (Art. 38[b], LC) In view of the above, Maryrose is guilty of large scale illegal recruitment. Her defense of GF and the Affidavit of Desistance as well as the refund given will not save her because R.A. No. 8042 is a special law, and illegal recruitment is malum prohibitum. (People v. Saulo, G.R. No. 125903, Nov. 15, 2000). (2005 Bar Question) Q: Sometime in the month of March 1997, in the City of Las Piñas, Bugo by means of false pretenses and fraudulent representation convinced Dado to give the amount of P 120,000.00 for processing of his papers so that he can be deployed to Japan. Dado later on found out that Bugo had misappropriated, misapplied and converted the money to her own personal use and benefit. Can Dado file the cases of illegal recruitment and estafa simultaneously? A: Yes, illegal recruitment and estafa cases may be filed simultaneously or separately. The filing of charges for illegal recruitment does not bar the filing of estafa, and vice versa. Bugo’s acquittal in the illegal recruitment case does not prove that she is not guilty of estafa. Illegal recruitment and estafa are entirely different offenses and neither one necessarily includes or is necessarily included in the other. A person who is convicted of illegal recruitment may, in addition, be convicted of estafa under Article 315, par. 2(a) of the RPC. In the same manner, a person acquitted of illegal recruitment may be held liable for estafa. Double jeopardy will not set in because illegal recruitment is malum prohibitum, in which there is no necessity to prove criminal intent, whereas estafa is malum in se, in the prosecution of which, proof of criminal intent is necessary. (Sy v. People, G.R. No. 183879, April 14, 2010) Q: Distinguish Illegal Recruitment from Estafa


RECRUITMENT AND PLACEMENT A: ILLEGAL RECRUITMENT Malum prohibitum, thus: 1. Criminal intent is NOT necessary 2. it is a crime which involves moral turpitude

It is not required that it be shown that the recruiter wrongfully represented himself as a licensed recruiter NOTE: It is enough that the victims were deceived as they relied on the misrepresentation and scheme that caused them to entrust their money in exchange of what they later discovered was a vain hope of obtaining employment abroad

ESTAFA Malum in se, thus: 1. criminal intent is necessary 2. crime which involves moral turpitude Accused defrauded another by abuse of confidence, or by means of deceit NOTE: It is essential that the false statement or fraudulent representation constitutes the very cause or the only motive which induces the complainant to part with the thing of value

Illegal recruitment and estafa cases may be filed simultaneously or separately. The filing of charges for illegal recruitment does not bar the filing of estafa, and vice versa. Double jeopardy will not set

(c) Liabilities Q: What is the liability of the private employment agency and the principal or foreign‐based employer? A: They are jointly and severally liable for any violation of the recruitment agreement and the contracts of employment. Note: This joint and solidary liability imposed by law against recruitment agencies and foreign Ers is meant to assure the aggrieved worker of immediate and sufficient payment of what is due him. If the recruitment/placement agency is a juridical being, the corporate officers and directors and partners as the case may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the claims and damages. (Becmen Service Exporter and Promotion v. Cuaresma, G.R. Nos. 182978‐79, April 7, 2009)

Q: What is the theory of imputed knowledge? A: A rule in insurance law that any information material to the transaction, either possessed by the

agent at the time of the transaction or acquired by him before its completion, is deemed to be the knowledge of the principal, at least so far as the transaction is concerned, even though in fact the knowledge is not communicated to the principal at all. (Leonor v. Filipinas Compania, 48 OG 243) Q: Sunace International Management Services (Sunace), deployed to Taiwan Montehermozo as a domestic helper under a 12‐month contract effective Feb. 1, 1997. The deployment was with the assistance of a Taiwanese broker, Edmund Wang, President of Jet Crown International Co., Ltd. After her 12‐month contract expired on Feb. 1, 1998, Montehermozo continued working for her Taiwanese employer for two more years, after which she returned to the Philippines on Feb. 4, 2000. Shortly after her return she file before the NLRC against Sunace, one Perez, the Taiwanese broker, and the employer‐foreign principal alleging that she was jailed for three months and that she was underpaid. Should Sunace be held liable for the underpayment for the additional two years that she worked for her Taiwanese employer under the theory of imputed knowledge? A: No, the theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to the principal Taiwanese employer, not the other way around. The knowledge of the principal‐foreign employer cannot, therefore, be imputed to its agent Sunace. There being no substantial proof that Sunace knew of and consented to be bound under the 2‐year employment contract extension, it cannot be said to be privy thereto. As such, it and its owner cannot be held solidarily liable for and of Montehermozo’s claims arising from the 2‐year employment extension. (Sunace v. NLRC, G.R. No. 161757, Jan. 25, 2006) (d)Pretemination of contract of migrant worker Q: Serrano, a seafarer, was hired by Gallant Maritime and Marlow Navigation Co. for 12 months as Chief Officer. On the date of his departure, he was constrained to accept a downgraded employment contract for the position of Second Officer, upon the assurance that he would be made Chief Officer after a month. It was not done; hence, he refused to stay on as Second Officer and was repatriated to the Phils. He had served only 2 months & 7 days of his contract, leaving an unexpired portion of 9 months & 23 days. Serrano filed with the LA a Complaint against Gallant Maritime and Marlow for constructive

13


UST GOLDEN NOTES 2011 dismissal and for payment of his money claims. The LA rendered a favorable decision to Serrano awarding him $8,770.00, representing his salary for 3 months of the unexpired portion of his contract of employment applying R.A. 8042, Sec 10, par 5: Money Claims. ‐ In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, the workers shall be entitled to the full reimbursement of his placement fee with interest of 12% per annum, plus his salaries for the unexpired portion of his employment contract or for 3 months for every year of the unexpired term, whichever is less. Is the subject clause constitutional? A: No. The subject clause contains a suspect classification in that, in the computation of the monetary benefits of fixed‐term employees who are illegally discharged, it imposes a 3‐month cap on the claim of OFWs with an unexpired portion of one year or more in their contracts, but none on the claims of other OFWs or local workers with fixed‐term employment. The subject clause singles out one classification of OFWs and burdens it with a peculiar disadvantage. The clause is a violation of the right of Serrano and other OFWs to equal protection and right to substantive due process, for it deprives him of property, consisting of monetary benefits, without any existing valid governmental purpose. Furthermore, prior to R.A. 8042, all OFWs, regardless of contract periods or the unexpired portions thereof, were treated alike in terms of the computation of their monetary benefits in case of illegal dismissal. Their claims were subjected to a uniform rule of computation: their basic salaries multiplied by the entire unexpired portion of their employment contracts. The same applies local workers with fixed‐term employment. Thus, Serrano is entitled to his salaries for the entire unexpired period of nine months and 23 days of his employment contract, pursuant to law and jurisprudence prior to the enactment of RA 8042. (Serrano v. Gallant Maritime Services & Marlow Navigation Co., Inc., G.R. No. 167614, Mar.24, 2009) c.Direct Hiring Q: What is Direct‐hiring? A: It is when an employer hires a Filipino worker for overseas employment without going through

14

the POEA or entities authorized by the Secretary of Labor. Q: What is the ban on direct‐hiring? A: GR: An Er may only hire Filipino worker for overseas employment through POEA or entities authorized by DOLE. XPN: Direct hiring by 1. International organizations 2. Name hires 3. Members of the diplomatic organizations 4. Other Ers as may be allowed by DOLE Q: Why is direct‐hiring prohibited? A: 1. To ensure the best possible terms and conditions of employment for the worker. 2. To assure the foreign Er that he hires only qualified Filipino workers. 3. To ensure full regulation of employment in order to avoid exploitation. 2. REGULATION AND ENFORCEMENT a. Remittance of foreign exchange earnings Q: What is the rule on remittance of foreign exchange earnings? A: GR: It shall be mandatory for all OFWs to remit a portion of their foreign exchange earnings to their families, dependents, and/or beneficiaries ranging from 50% ‐ 80% depending on the worker’s kind of job. (Rule VIII, Book III, POEA Rules) XPN: 1. The worker’s immediate family members, beneficiaries and dependents are residing with him abroad 2. Immigrants and Filipino professionals and employees working with the UN agencies or specialized bodies 3. Filipino servicemen working in U.S. military installations. (Resolution No. 1‐ 83, Inter‐Agency Committee for Implementation of E.O. 857) Q: What is the effect of failure to remit? A: 1. Workers – Shall be suspended or removed from the list of eligible workers for overseas employment.


RECRUITMENT AND PLACEMENT 2.

Employers – Will be excluded from the overseas employment program. Private employment agencies shall face cancellation or revocation of their licenses or authority to recruit. (Sec. 9, E.O. 857)

b. Prohibited Activities Q: What are prohibited practices in recruitment/placement (Art. 34.)? A: 1. Furnishing or publishing any false notice/information/document related to recruitment/employment 2. Failure to file reports required by SLE 3. Inducing or attempting to induce a worker already employed to quit his employment in order to offer him another unless the transfer is designed to liberate a worker from oppressive terms and conditions 4. Recruitment/placement of workers in jobs harmful to public health or morality or to the dignity of the country 5. Engaging directly or indirectly in the management of a travel agency 6. Substituting or altering employment contracts without approval of DOLE 7. Charging or accepting any amount greater than that specified by DOLE or make a worker pay any amount greater than actually received by him 8. Committing any act of misrepresentation to secure a license or authority 9. Influencing or attempting to influence any person/entity not to employ any worker who has not applied of employment through his agency 10. Obstructing or attempting to obstruct inspection by SLE or by his representatives 11. Withholding or denying travel documents from applicant workers before departure for monetary considerations other than authorized by law 12. Granting a loan to an OFW which will be used for payment of legal and allowable placement fees 13. Refusing to condone or renegotiate a loan incurred by an OFW after his employment contract has been prematurely terminated through no fault of his or her own 14. For a suspended recruitment/manning agency to engage in any kind of recruitment activity including the

processing of pending workers' applications; and 15. For a recruitment/manning agency or a foreign principal/ Er to pass on the OFW or deduct from his or her salary the payment of the cost of insurance fees, premium or other insurance related charges, as provided under the compulsory worker's insurance coverage 16. Imposing a compulsory and exclusive arrangement whereby an OFW is required to: a. Avail a loan only from specifically designated institutions, entities or persons b. To undergo health examinations only from specifically designated medical, entities or persons, except seafarers whose medical examination cost is shouldered by the shipowner c. To undergo training of any kind only from designated institutions, entities or persons, except for recommendatory trainings mandated by principals/shipowners. (Sec. 6, R.A. 10022) c. Regulatory and Visitorial Powers of the Labor Secretary Q: What are the regulatory powers of the Secretary of Labor and Employment (SLE)? A: 1. Restrict and regulate the recruitment and placement activities of all agencies 2. Issue orders and promulgate rules and regulations Q: What constitute visitorial power? A: 1. Access to employer’s records and premises at any time of the day or night, whenever work is being undertaken 2. To copy from said records 3. Question any employee and investigate any fact, condition or matter which may be necessary to determine violations or which may aid in the enforcement of the Labor Code and of any labor law, wage order, or rules and regulation issued pursuant thereto. Q: Give 4 instances where the visitorial power of the SLE may be exercised under the Labor Code. A: Power to:

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UST GOLDEN NOTES 2011

provisions

1.

2.

3. 4.

Inspect books of accounts and records of any person or entity engaged in recruitment and placement, require it to submit reports regularly on prescribed forms and act in violations of any provisions of the LC on recruitment and placement. (Art. 37) Have access to employer’s records and premises to determine violations of any provisions of the LC on recruitment and placement. (Art. 128) Conduct industrial safety inspections of establishments. (Art. 165) Inquire into the financial activities of legitimate labor organizations (LLO) and examine their books of accounts upon the filing of the complaint under oath and duly supported by the written consent of at least 20% of the total membership of the LO concerned.

Q: Can SLE issue search warrants or warrants of arrest? A: No. Only a judge may issue search and arrest warrants. Art 38 (c) of the Labor Code is unconstitutional inasmuch as it gives the SLE the power to issue search or arrest warrants. The labor authorities must go through the judicial process. d. Penalties for Illegal Recruitment Q: What is the consequence of conviction of illegal recruitment (IR)? A: PENALTIES (under R.A. 10022) Offender / Offense IR as economic sabotage Provided: 1. If person illegally recruited is below 18 years of age or 2. Illegal recruitment is committed by a non‐licensee/non‐ holder Any person found guilty of illegal recruitment Any person found guilty of the prohibited acts Licensee/holder of authority violates

16

Penalty Life imprisonment + fine of P2M‐P5M Maximum penalty shall be imposed 12 yrs and 1 day ‐ 20 yrs imprisonment; or Fine: P1M‐P2M 6 yrs and 1 day ‐ 12 yrs imprisonment; or Fine of P500K ‐ P1M 2‐5 yrs imprisonment; or Fine: P10K ‐ P50K;

or both

Non‐licensee/non‐ holder of authority violates provisions Corporation, partnership, association, or entity

Alien

In every case

4‐8 yrs imprisonment; or Fine: P20K ‐ P100K or both Penalty imposed upon officer/s responsible for violation Penalties prescribed under RA 10022, + Deportation without further proceedings Automatic revocation of license or authority and all permits and privileges of the recruitment or manning agency, lending institutions, training school or medical clinic

Q: What are the remedies under the Migrant Workers Act and how may they be enforced? A: CRIMINAL ACTIONS RTC Province or city: 1. Where the offense was committed or 2. Where the offended party actually resides at the same time of the commission of the offense MONEY CLAIMS NLRC Original and exclusive jurisdiction to hear and decide claims arising out of an Er‐Ee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages. • The liability of the principal/ Er and the recruitment/ placement agency for any and all claims shall be joint and several. • The performance bond to de filed by the recruitment/ placement agency shall be answerable for all money claims or damages that may be awarded to the workers. • If the recruitment/placement agency is a juridical being, the corporate officers and directors and partners as the case may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the claims and damages. ADMINISTRATIVE ACTIONS POEA


RECRUITMENT AND PLACEMENT Original and exclusive jurisdiction to hear and decide: 1. All cases which are administrative in character, involving or arising out of violations of rules and regulations relating to licensing and registration of recruitment and employment agencies or entities and 2. Disciplinary action (DA) cases and other special cases which are administrative in character, involving Ers, principals, contracting partners and Filipino migrant workers. a. It may be filed with the POEA Adjudication Office or the DOLE/POEA regional office of the place where the complaint applied or was recruited at the option of the complainant. The office with which the complaint was first filed shall take cognizance of the case. b. DA cases and other special cases, as mentioned in the preceding Section, shall be filed with POEA Adjudication Office. PERIODS Mandatory Period for Resolution of Illegal Recruitment Cases The preliminary investigations (PI) of cases under R.A. 10022 shall be terminated within a period of 30 calendar days from the date of their filing. If the PI is conducted by a If the PI is conducted by prosecution officer and a a judge and a prima prima facie case is facie case is found to established exist Prosecution officer Information shall be filed within 48 hours from the in court within 24 hours date of receipt of the from the termination of records of the case. (Sec. the investigation 11) Prescriptive Period for Illegal Recruitment Cases Simple Illegal Recruitment

Economic Sabotage

Within 5 yrs from the time illegal recruitment has happened

Within 20 yrs from the time illegal recruitment has happened. (Sec. 12,R.A. 8042)

Q: Is compromise agreement on money claims allowed? A: Yes. Consistent with the policy encouraging amicable settlement of labor disputes, Sec. 10 of R.A. 8042 allows resolution by compromise of cases filed with the NLRC. Q: When shall compromise agreements on money claims be paid? A: Any compromise/amicable settlement or voluntary agreement on money claims inclusive of damages shall be paid within 4 months from the approval of the settlement by the appropriate authority.

Do OT and leave pay form part of the salary basis in the computation of the monetary award? A: No. The word “salaries” in Sec. 10(5) does not include overtime and leave pay. For seafarers, DOLE Department Order No. 33, series 1996, provides a Standard Employment Contract of Seafarers, in which salary is understood as the basic wage, exclusive of OT, leave pay and other bonuses; whereas OT pay is compensation for all work “performed” in excess of the regular 8 hours, and holiday pay is compensation for any work “performed” on designated rest days and holidays. (Serrano v. Gallant Maritime Services & Marlow Navigation Co., Inc., G.R. No. 167614, Mar. 24, 2009) 3.OTHER RELATED TOPICS Philippine Overseas Employment Administration Q: What are the principal functions of the POEA? A: 1. Protection of the right of Filipino workers to fair and equitable employment practices 2. Regulation of private sector participation in the recruitment and overseas placement of workers by setting up a licensing and registration system 3. Deployment of Filipino workers through gov’t to gov’t hiring 4. Formulation, implementation, and monitoring of overseas employment of Filipino workers taking into consideration their welfare and domestic manpower requirements 5. Shall inform migrant workers not only of their rights as workers but also of their rights as human beings, instruct and guide the workers how to assert their rights and provide the available mechanism to redress violation of their rights. (Sec. 14, R.A. 10022) 6. Implementation, in partnership with other law‐enforcement agencies, of an intensified program against illegal recruitment activities. (Sec. 14, R.A. 10022) Q: May the POEA, at any time terminate or impose a ban on employment of migrant workers? A: Yes, in consultation with the DFA based on the ff. grounds: 2. In pursuit of the National Interest or

17


UST GOLDEN NOTES 2011 3.

When public welfare so requires. (Sec. 4 R.A. 10022)

Q: What are the minimum conditions/ provisions of overseas employment contracts? A: 1. Guaranteed wages for regular hours and overtime, not lower than the minimum wage prescribed in all of the ff: a. The host country b. Bilateral agreements or international conventions ratified by the host country and the Philippines c. The Philippines 2. Free transportation to and from the worksite or offsetting benefit 3. Free food and accommodation or offsetting benefit 4. Just/authorized causes of termination of the contract or services of the worker Note: An agreement that diminishes the Ees pay and benefits as contained in a POEA‐approved contract is void, unless such subsequent agreement is approved by the POEA.

Q: What is the rule on deployment of OFWs? A: The State shall allow the deployment of OFWs: 1. Only in countries where the rights of Filipino migrant workers are protected. 2. To vessels navigating the foreign seas or to installations located offshore or on high seas whose owners/Ers are compliant with international laws and standards that protect the rights of migrant workers. 3. To companies and contractors with international operations: Provided, That they are compliant with standards, conditions and requirements, as embodied in the employment contracts prescribed by the POEA and in accordance with internationally‐accepted standards. (Sec. 3, R.A. 10022 amending R.A. 8042) Q: What are the guarantees of the receiving country for the protection of the rights of OFWs? A: 1. It has existing labor and social laws protecting the rights of workers, including migrant workers; 2. It is a signatory to and/or a ratifier of multilateral conventions, declarations or resolutions relating to the protection of workers, including migrant workers; and

18

3.

It has concluded a bilateral agreement or arrangement with the government on the protection of the rights of OFWs. . (Sec. 3, R.A. 10022 amending R.A. 8042)

Provided, that the receiving country is taking positive, concrete measures to protect the rights of migrant workers in furtherance of any of the guarantees. Note: In the absence of a clear showing that any of the guarantees exists in the country of destination of the migrant workers, no permit for deployment shall be issued by the POEA.

Q: What is the rule on repatriation? A: GR: The repatriation of the: 1. Worker and the transport of his personal belongings ‐ shall be the primary responsibility of the agency which recruited or deployed the worker overseas. 2. Remains and transport of the personal belongings of a deceased worker and all costs attendant thereto ‐ shall be borne by the principal and/or the local agency. XPNs: 1. If the termination of employment is due solely to the fault of the worker, the principal/ Er or agency shall not be responsible for the repatriation of the former and/or his belongings 2. In cases of war, epidemic, disaster or calamities, natural or man‐made, and other similar event, and where the principal or recruitment agency cannot be identified, the Overseas Workers Welfare Administration, in coordination with appropriate international agencies, shall take charge of the repatriation. (Sec.15, R.A. 8042) Q: What is the rule on mandatory repatriation of underage migrant workers? A: Upon discovery or being informed of the presence of migrant workers whose ages fall below the minimum age requirement for overseas deployment, the responsible officers in the foreign service shall without delay repatriate said workers and advise the DFA through the fastest means of communication available of such discovery and other relevant information. The license of a recruitment/manning agency which recruited or deployed an underage migrant worker shall be automatically revoked and shall be imposed a fine


RECRUITMENT AND PLACEMENT of not less than P500,000 but not more than P1,000,000. (Sec. 9, R.A. 10022) Q: What are the regulatory and adjudicatory functions of the POEA? A: 1. Regulatory – It regulates the private sector participation in the recruitment and overseas placement of workers through its licensing and registration system. 2. Adjudicatory a. Administrative cases involving violations of licensing rules and regulations and registration of recruitment and employment agencies or entities b. Disciplinary action cases and other special cases which are administrative in character involving employers, principals, contracting partners and Filipino migrants. Q: What are the grounds for disciplinary action of OFW’s? A: Under R.A. 8042, these are: 1. Prostitution 2. Unjust refusal to depart for the worksite 3. Gunrunning or possession of deadly weapons 4. Vandalism or destroying company property 5. Violation of the laws and sacred practices of the host country and unjustified breach of employment contract 6. Embezzlement of funds of the company or fellow worker entrusted for delivery to relatives in the Phils. 7. Creating trouble at the worksite or in the vessel 8. Gambling 9. Initiating or joining a strike or work stoppage where the laws of the host country prohibits strikes or similar actions 10. Commission of felony punishable by Philippine laws or by the host country 11. Theft or robbery 12. Drunkenness 13. Drug addiction or possession or trafficking of prohibited drugs 14. Desertion or abandonment Q: What is the distinction between the jurisdiction of the LA and POEA? A:

JURISDICTION Labor Arbiter Original and exclusive jurisdiction over all claims arising out of Er‐Ee relationship or by virtue of any law or contract involving OFWs including claims for: 1. Actual 2. Moral 3. Exemplary 4.Other forms of damages. (Sec. 10, R.A. 8042)

POEA Original and exclusive jurisdiction over: 1. All cases which are administrative in character relating to licensing and registration of recruitment and employment agencies 2. Disciplinary Action cases and other special cases, which are administrative in character, involving Ees, principals, contracting partners and Filipino migrant workers. (Rule VII, Book VII, POEA Rules)

Q: A seafarer was prevented from leaving the port of Manila and refused deployment without valid reason. His POEA‐approved employment contract provides that the employer‐employee relationship shall commence only upon the seafarer’s actual departure from the port in the point of hire. Is the seafarer entitled to relief under the Migrant Workers’ Act, in the absence of an employer‐employee relationship? A: Yes. Despite the absence of an employer‐ employee relationship, the NLRC has jurisdiction over the seafarer’s complaint. The jurisdiction of labor arbiters is not limited to claims arising from Er‐Ee relationships. Sec. 10 of the Migrant Workers Act provides that the labor arbiters shall have jurisdiction over claims arising out of an Er‐Ee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages. Since the present case involves the employment contract entered into by petitioner for overseas employment, his claims are cognizable by the labor arbiters of the NLRC. (Santiago v. CF Sharp Crew Management,G.R. No. 162419, July 10, 2007) Q: What matters fall outside the jurisdiction of the POEA? A: 1. Foreign judgments – such claim must be brought before regular courts. POEA is not a court; it is an administrative agency, exercising adjudicatory or quasi‐judicial functions. 2. Torts – falls under the provisions of the Civil Code.

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UST GOLDEN NOTES 2011 Employment of Non‐Resident Aliens Q: What is required in the employment of non‐ resident aliens? A: Any alien seeking admission to the Phil. for employment purposes and any domestic or foreign employer (Er) who desires to engage an alien for employment in the Philippines: 1. Shall obtain an employment permit from the DOLE 2. The permit may be issued to a non‐ resident alien or to the applicant Er after a determination of the non‐availability of a person in the Phil. who is competent, able and willing at the time of application to perform the services for which the alien is desired 3. For an enterprise registered in preferred areas of investments, said permit may be issued upon recommendation of the gov’t agency charged with the supervision of said registered enterprise Q: The DOLE issued an alien employment permit for Earl Cone, a U.S. citizen, as sports consultant and assistant coach for GMC. Later, the Board of Special Inquiry of the Commission on Immigration and Deportation approved Cone’s application for a change of admission status from temporary visitor to pre‐arranged employee. A month later, GMC requested that it be allowed to employ Cone as full‐fledged coach. The Dole Regional Director granted the request. The Basketball Association of the Phils. appealed the issuance of said permit to the SLE who cancelled Cone’s employment permit because GMC failed to show that there is no person in the Philippines who is competent and willing to do the services nor that the hiring of Cone would redound to the national interest. Is the act of SLE valid? A: Yes. GMC’s claim that hiring of a foreign coach is an Er’s prerogative has no legal basis. Under Art. 40 of the LC, an Er seeking employment of an alien must first obtain an employment permit from the DOLE. GMC’s right to choose whom to employ is limited by the statutory requirement of an employment permit. (GMC v. Torres, G.R. No. 9366, April 22, 1991) Art. 41. Prohibition Against Transfer of Employment Q: Who are required to obtain an employment permit? A: GR: Only non‐resident aliens;

20

XPNS: 1. Diplomatic services and foreign gov’t officials 2. Officers and staff of int’l organizations and their legitimate spouses 3. Members of governing board who has voting rights only 4. Those exempted by special laws 5. Owners and representatives of foreign principals who interview Filipino applicants for employment abroad 6. Aliens whose purpose is to teach, present and/or conduct research studies 7. Resident aliens. (D.O. 75‐06, May 31, 2006) Q: May the non‐resident alien transfer employment after issuance of the employment permit? A: After the issuance of an employment permit, the alien shall not transfer to another job or change his employer without prior approval of the Secretary of Labor. Q: What is required for immigrants and resident aliens? A: An Alien Employment Registration Certificate. Q: What is the duration of the employment permit? A: GR: Minimum of 1 year XPN: Unless revoked and subject to renewal Q: May aliens be employed in entities engaged in nationalized activities? A: GR: No. XPNs: 1. Sec. of Justice specifically authorizes the employment of technical personnel 2. Aliens are elected members of the board of directors or governing body of corporations or associations or 3. Enterprises registered under the Omnibus Investment Code in case of technical, supervisory or advisory positions, but for a limited period.


RECRUITMENT AND PLACEMENT Art. 25. Private Sector Participation in the Recruitment and Placement of Workers Q: What are the entities in the private sectors that can participate in recruitment and placement of workers? A: 1. Shipping or manning agents or representatives 2. Private recruitment offices 3. Public employment offices 4. Construction contractors if authorized by the DOLE and Construction Industry Authority. 5. Persons that may be authorized by the SLE 6. Private employment agencies. (Sec. 1, Rule VII, Book I, IRR) Q: What are the qualifications for participation in recruitment and placement of workers? A: 1. Filipino citizens, partnerships or corporations at least 75% of the authorized capital stock of which is owned and controlled by Filipino citizens; (Art. 27, LC) 2. Capitalization a. Single proprietorship or partnership ‐A minimum capitalization of P2 million b. Corporation ‐A minimum paid‐up capital of P2 million Provided, that those with existing licenses shall, within 4 yrs from the effectivity hereof, increase their capitalization or paid up capital, as the case may be, to P2 million at the rate of P250,000.00 every year. (Art. 28, LC) 3. Not otherwise disqualified by law or other government regulations to engage in the recruitment and placement of workers for overseas employment. (Rule I, Part II, POEA Rules) 4. Payment of registration fees 5. Posting of surety/cash bonds Q: How will POEA regulate private sector participation in the recruitment and overseas placement of workers? A: By setting up a licensing and registration system. (Sec. 14, R.A. 10022)

Q: Is a corporation, 70% of the authorized and voting capital of which is owned and controlled by Filipino citizens, allowed to engage in the recruitment and placement of workers, locally or overseas? Explain briefly. A: No. It is because Art. 27 of the Labor Code requires at least 75%. (2002 Bar Question) Q: Who are disqualified to engage in the business of recruitment and placement of workers? A: 1. Travel agencies and sales agencies of airline companies; (Art. 26, LC) 2. Officers or members of the board of any corporation or members in a partnership engaged in the business of a travel agency; 3. Corporations and partnerships, when any of its officers, members of the board or partners, is also an officer, member of the board or partner of a corporation or partnership engaged in the business of a travel agency; 4. Persons, partnerships or corporations which have derogatory records, such as but not limited to those: a. Certified to have derogatory record or information by the NBI or by the Anti‐Illegal Recruitment Branch of the POEA; b. Against whom probable cause or prima facie finding of guilt for illegal recruitment or other related cases exists; c. Convicted for illegal recruitment or other related cases and/or crimes involving moral turpitude; and d. Agencies whose licenses have been previously revoked or cancelled by the POEA for violation of R.A. 8042, P.D. 442 as amended and their implementing rules and regulations as well as these rules and regulations. 5. Any official or Ee of the DOLE, POEA, OWWA, DFA and other government agencies directly involved in the implementation of R.A. 8042 and/or any th of his/her relatives within the 4 civil degree of consanguinity or affinity; and 6. Persons or partners, officers and directors of corporations whose licenses have been previously cancelled or revoked for violation of recruitment laws. (Sec. 2, Rule I, 2002 Rules and Regulations on the

21


UST GOLDEN NOTES 2011 Recruitment and Employment of Land‐ Based Workers) Art. 26. Travel Agencies Prohibited to Recruit Q: What is the rule on recruitment of travel agencies and sales agencies of airline companies? A: They are prohibited from engaging in the business of recruitment and placement of workers for overseas employment whether for profit or not. Q: WTTA is a well‐known travel agency and an authorized sales agent of the PAL. Since majority of its passengers are overseas workers, WTTA applied for a license for recruitment and placement activities. It stated in its application that its purpose is not for profit but to help Filipinos find employment abroad. Should the application be approved? A: The application should be disapproved, as it is prohibited by Art. 26 of the LC, to wit: "Art 26. Travel agencies and sales agencies of airline companies are prohibited from engaging in the business of recruitment and placement of workers for overseas employment whether for profit or not." Rule I, Part II POEA Rules and Regulations Governing the Recruitment and Employment of Land‐Based Workers (2002) disqualifies any entity having common director or owner of travel agencies and sales agencies of airlines, including any business entity from the recruitment and placement of Filipino workers overseas, whether they derive profit or not. (2006 Bar Question) Art. 32. Fees to be Paid by Workers Q: When may a worker be charged any fee? A: Only when: 1. He has obtained work through recruiter’s efforts, and 2. The worker has actually commenced working

Note: A land based agency may charge and collect from its hired workers a placement fee in an amount equivalent to 1 month salary, exclusive of documentation costs.

Q: What are the only authorized payments that may be collected from a hired worker? A: 1. Placement fee in an amount equivalent to one month’s salary of the worker and 2. Documentation costs.

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LABOR STANDARDS C. LABOR STANDARDS 1. HOURS OF WORK a. Coverage/ Exclusions Q: Who determines working conditions? A: Generally, they are determined by the employer, as he is usually free to regulate, according to his discretion, all aspects of employment. Q: What is the limitation on the employer’s power to regulate working conditions? A: It must be done in good faith and not for the purpose of defeating or circumventing the rights of the employees. Such are not always absolute and must be exercised with due regard to the rights of labor. Note: One’s employment, profession, trade or calling is a property right and the wrongful interference therewith is an actionable wrong.

Q: When does the condition on employment under the Labor Code apply? A: Only if an Er‐Ee relationship exists. Q: Who are the employees that are covered by the conditions of employment? A: GR: It applies to all Ee’s in all establishments. XPN: 1. Gov’t employees 2. Managerial employees 3. Field personnel 4. The employers family members who depend on him for support 5. Domestic helpers and persons in the personal service of another, and 6. Workers who are paid by results as determined under DOLE regulations Q: Who are government employees (Ees)? A: They are Ees of the: 1. National Government 2. Any of its political subdivisions 3. Including those employed in GOCCs with original charters. Q: What law governs government Ees? A: The Civil Service Law, rules and regulations.

Q: Who are managerial Ees? A: Those whose primary duty consists of the management of the establishment in which they are employed or a department or subdivision thereof, and other officers or members of the managerial staff. They must meet all of the ff. conditions, namely: 1. Primary duty: management of the establishment in which they are employed or of a department or sub‐ division thereof; 2. Customarily or regularly direct the work of 2 or more Ees 3. Has the authority to hire or fire other Ees of lower rank; or their suggestions and recommendations as to the hiring and firing and as to the promotion or any change of status of other Ees are given particular weight. 4. Execute under general supervision work along specialized or technical lines requiring special training, experience, or knowledge 5. Execute under general supervision special assignment and tasks; and 6. Do not devote more than 20% of their hours worked to activities which are not directly and closely related to performance of the work described. (Art. 82[2]) Q: Why are managerial Ees not covered? A: They are employed by reason of their special training, expertise or knowledge and for positions requiring the exercise of discretion and independent judgment. Value of work cannot be measured in terms of hours. Q: Who are field personnel? A: They are: 1. non‐agricultural employees 2. who regularly perform their duties 3. away from the principal place of business or branch office of the employer; and 4. whose actual hours of work in the field cannot be determined with reasonable certainty. Q: Who are workers paid by results? A: They are:

23


UST GOLDEN NOTES 2011 1. 2. 3.

paid based on the work completed; and not on the time spent in working including those who are paid on piece‐ work, “takay”, “pakiaw”, or task basis if their output rates are in accordance with the standards prescribed. Q: Who are domestic helpers and persons in the personal service of another? A: Those who: 1. perform services in the employers (Er) home which are usually necessary or desirable for the maintenance or enjoyment thereof; or 2. minister to the personal comfort, convenience or safety of the Er as well as the members of his Ers household. Q: A house personnel was hired by a ranking company official to maintain a staff house provided for the official. The personnel is being paid by the company itself. Is the house personnel a domestic servant of the company official? A: No, the personnel is not a domestic helper but a regular employee of the company. Q: What are the 3 groups of employees (Ees) under the LC? A: 1. Managerial Ee ‐ One who is vested with the powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay‐off, recall, discharge, assign or discipline Ees. 2. Supervisory Ee ‐ those who in the interest of the Er, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. 3. Rank‐and‐File Ee ‐ all Ees not falling within any of the above definitions. (Art. 212[m]) b. Normal hours of work Q: What are the normal hours of work of an Ee? A: It should not exceed 8 hours in a general working day. Note: Normal hours of work may be shortened or compressed.

Q: What are considered hours worked?

24

A: 1.

2.

All time during which an Ee is required to be: a. On duty, or b. At the Ers premises, or c. At a prescribed workplace All time during which an Ee is suffered or permitted to work. (Sec. 3, Rule I, Book III, IRR)

Q: What are the principles in determining hours worked? A: 1. All hours which the Ee is required to give to his Er regardless of whether or not such hours are spent in productive labor or involve physical or mental exertion. 2. Rest period is excluded from hours worked, even if Ee does not leave his workplace, it being enough that: a. He stops working b. May rest completely c. May leave his workplace, to go elsewhere, whether within or outside the premises of the workplace 3. All time spent for work is considered hours worked if: a. The work performed was necessary b. If it benefited the Er c. Or the Ee could not abandon his work at the end of his normal working hours because he had no replacement d. Provided, the work was with the knowledge of his Er or immediate supervisor 4. The time during which an Ee is inactive by reasons of interruptions in his work beyond his control shall be considered working time: a. If the imminence of the resumption of the work requires the Ees presence at the place of work or b. If the interval is too brief to be utilized effectively and gainfully in the Ees own interest. (Sec. 4, Rule I, Book III, IRR)


LABOR STANDARDS (a) Exceptions: Health Personnel & Compressed Work Week Health Personnel Q: What are the hours of work of health personnel? A: GR: 8 hours/5 days (40‐hour work week), exclusive of time for meals. XPN: Where the exigencies of the service require that such personnel work for 6 days or 48 hours, they shall be entitled to an additional compensation of at least 30% of their regular wage for work on the 6th day. Note: 40‐hour work week does not apply if there is a training agreement between the resident physician and the hospital and the training program is duly accredited or approved by appropriate government agency.

Q: Who are covered by the 40‐hour work week? A: 1. Health personnel in cities and municipalities with a population of at least 1 million; or 2. Hospitals and clinics with a bed capacity of at least 100 Note: Art. 83(2) do not require hospitals to pay the Ees a full weekly salary with paid 2 days off. (San Juan de Dios Ees Assoc.‐AFW et al. vs. NLRC, G.R. No. 126383, Nov.28, 1997) Compressed Workweek Q: What is a compressed workweek? A: The normal workweek is reduced to less than 6 days but the total number of work‐hours of 48 hours per week shall remain. The normal workday is increased to more than 8 hours but not to exceed 12 hours, without corresponding overtime premium. The concept can be adjusted accordingly depending on the normal workweek of the company. (Department Advisory Order No. 2, Series of 2009) Q: When is the implementation of a compressed work week valid? A: The validity of the reduction of working hours can be upheld when the arrangement is temporary, it is a more humane solution instead of a retrenchment of personnel, there is notice and

consultations with the workers and supervisors, a consensus is reached on how to deal with deteriorating economic conditions and it is sufficiently proven that the company was suffering from losses. Under the Bureau of Working Conditions’ bulletin, a reduction of the number of regular working days is valid where the arrangement is resorted to by the employer to prevent serious losses due to causes beyond his control, such as when there is a substantial slump in the demand for his goods or services or when there is lack of raw materials. There is one main consideration in determining the validity of reduction of working hours – that the company was suffering from losses. A year of financial losses would not justify a reduced workweek. (Linton Commercial v. Hellera, G.R. No. 163147, October 10, 2007) Q: Under what conditions may a "compressed work week" schedule be legally authorized as an exception to the "8‐hour a day" requirement under the LC? A: 1. 2. 3.

4.

5. 6.

The Ee voluntarily agrees to it There is no diminution in their weekly or monthly take home pay or fringe benefits The benefits are more than or at least commensurate or equal to what is due the Ees without the compressed work week OT pay will be due and demandable when they are required to work on those days which should have ceased to be working days because of the compressed work week schedule. No strenuous physical exertion or that they are given adequate rest periods. It must be for a temporary duration as determined by the DOLE. (2005 Bar Question)

Q: What are the requisites for adoption of compressed workweek? A: 1. The Er shall notify the DOLE through the Regional Office which has jurisdiction over the workplace, of the adoption of compressed workweek. 2. The notice shall be in Report Form attached to the advisory. 3. The Regional Office shall conduct an ocular visit to validate whether the adoption of the flexible work arrangements is in accordance with this issuance. (Department Advisory Order No. 2, Series of 2009)

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UST GOLDEN NOTES 2011 c. Work interruption due to brownoutS Q: What are the guidelines on power interruptions? A: 1.

Brownouts of short duration but not exceeding 20 minutes shall be treated as worked or compensable hours whether used productively by the employees (Ees) or not. 2. Brownouts running for more than 20 minutes may not be treated as hours worked provided any of the following conditions are present: a. The Ees can leave their workplace or go elsewhere within or without the work premises; or b. The Ees can use the time effectively for their own interest. 3. In each case, the Er may extend the working hours of his Ees outside the regular schedules to compensate for the loss of productive man‐hours without being liable for OT pay. 4. Industrial enterprises with one or two work shifts may adopt any of the work shift prescribed for enterprises with 3 work shifts to prevent serious loss or damage to materials, machineries, or equipment that may result case of power interruptions. (Policy Instruction No. 36) d. Meal Break Q: What is the duration of the meal period? A: Every Er shall give his Ees not less than 60 minutes or 1 hour time‐off for regular meals. Q: Is the meal period compensable? A: Being time‐off, it is not compensable. Employee must be completely relieved from duty. Q: When is the meal period considered compensable? A: It is compensable where the lunch period or meal time: 1. 2.

26

Is predominantly spent for the employers benefit; or Where it is less than 20 minutes

Note: Where during meal period, the laborers are required to stand by for emergency work, or where the meal hour is not one of complete rest, such is considered OT. (Pan Am vs. Pan Am Ees Association, G.R. No. L‐16275, Feb. 23, 1961) Rest periods or coffee breaks running from 5 to 20 minutes shall be considered as compensable working time. (Sec. 7, Rule I, Book III, IRR)

Q: Are meal periods provided during OT work compensable? A: Yes, since the 1 hour meal period (non‐ compensable) is not given during OT work because the latter is usually for a short period and to deduct from the same would reduce to nothing the Ees OT work. Thus, the 1 hour break for meals during OT should be treated as compensable. Q: What are the instances where meal periods shortened to not less than 20 minutes is compensable or not compensable? A: 1.

2.

Compensable – At the instance of Employer, when: a. Work is non‐manual in nature or does not involve strenuous physical exertion; b. Establishment regularly operates less than 16 hours a day; c. Work is necessary to prevent serious loss of perishable goods. d. Actual or impending emergency or there is urgent work to be performed on machineries and equipment to avoid serious loss which the Er would otherwise suffer. (Sec. 7, Rule I, Book III, IRR) Not Compensable – Ee requested for the shorter meal time so that he can leave work earlier than the previously established schedule. Requisites: a. Ees voluntarily agree in writing and are willing to waive OT pay for the shortened meal period; b. No diminution in the salary and other fringe benefits of the Ees which are existing before the effectivity of the shortened meal period; c. Work of the Ees does not involve strenuous physical exertion and they are provided with adequate coffee breaks in the morning and afternoon;


LABOR STANDARDS d.

e.

f.

Value of the benefits derived by the Ees from the proposed work arrangements is equal to or commensurate with the compensation due them for the shortened meal period as well as the OT pay for 30 minutes as determined by the Ees concerned; OT pay will become due and demandable after the new time schedule Arrangement is of temporary duration.

e. Idle time, waiting time, commuting time/ travel time, whether part of hours of work or not Q: When is an Ee considered working while on call? A: When Ee is required to remain on call in the Ers premises or so close thereto that he cannot use the time effectively and gainfully for his own purpose. Q: When idle time is considered working time? A: When the employee is idle or inactive by reason of interruptions beyond his control shall be considered working time. Q: When is waiting time considered working time? A: 1. If waiting is an integral part of his work, or 2. The Ee is required or engaged by the Er to wait (engaged to wait) Note: The controlling factor is whether waiting time spent in idleness is so spent predominantly for the Er’s benefit or for the Ee.

Q: When is waiting time not considered working time? A: When the Ee is waiting to be engaged: idle time is not working time; it is not compensable. Q: When is travel time considered working time? A: 1.

Travel from home to work GR: Normal travel from home to work is not working time. XPNS: a. Emergency call outside his regular working hours where he is required

b. c. d.

to travel to his regular place of business or some other work site. Done through a conveyance provided by the employer (Er). Done under the supervision and control of the Er. Done under vexing and dangerous circumstance.

Travel that is all in a day’s work – time spent in travel as part of the employees (Ees) principal activity e.g. travel from job site to job site during the work day, must be counted as working hours. 3. Travel away from home GR: a. Travel that requires an overnight stay on the part of the Ee when it cuts across the Ees workday is clearly working time. b. The time is not only hours worked on regular workdays but also during corresponding working hours on non‐working days. Outside of these regular working hours, travel away from home is not considered working time. XPN: During meal period or when Ee is permitted to sleep in adequate facilities furnished by the Er. Q: What are the conditions in order for lectures, meetings and training programs to be not considered as working time? A: All of the ff. conditions must be present: 1. Attendance is outside of the employers regular working hours 2. Attendance is in fact voluntary and 3. The employee does not perform any productive work during such attendance. f. Overtime work: Undertime offset by overtime, Waiver of overtime Q: What is overtime work (OT)? 2.

A: Work performed beyond 8 hours within the worker’s 24 hour workday. Note: Express instruction from the employer (Er) to the employee (Ee) to render OT work is not required for the Ee to be entitled to OT pay; it is sufficient that the Ee is permitted or suffered to work. However, written authority after office hours during rest days

27


UST GOLDEN NOTES 2011 and holidays are required for entitlement to compensation.

Q: What is a work day? A: The 24‐hour period which commences from the time the employee regularly starts to work e.g. If the worker starts to work 8 am today, the workday is from 8 am today up to 8 am tomorrow. Note: Minimum normal working hours fixed by law need not be continuous to constitute the legal working day.

Q: What is the rationale behind OT pay? A: Employee is made to work longer than what is commensurate with his agreed compensation for the statutory fixed or voluntarily agreed hours of labor he is supposed to do. (PNB vs. PEMA and CIR, G.R. No. L‐30279, July 30, 1982) Discourages the employer (Er) from requiring such work thus protecting the health and well‐being of the worker, and also tend to remedy unemployment by encouraging Ers to employ others workers to do what cannot be accomplished during the normal hours of work. Q: Distinguish Overtime pay from premium pay. A: OVERTIME PAY Additional compensation for work performed beyond 8 hours on ordinary days (within the worker’s 24‐hour workday)

PREMIUM PAY Additional compensation for work performed within 8 hours on days when normally he should not be working (on non‐working days, such as rest days and special days.) But additional compensation for work rendered in excess of 8 hours during these days is also considered OT pay.

Q: What are the OT pay rates? A: PAY RATES OT during a regular working day Additional compensation of 25% of the regular wage OT during a holiday or rest day

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Rate of the first 8 hours worked on plus at least 30% of the regular wage (RW): if done on a special holiday OR rest day: 30% of 130% of RW If done on a special holiday AND rest day: 30% of 150% of RW if done on a regular holiday: 30% of 200% of RW

Q: What is the basis of computing the OT pay and additional remuneration? A: Regular wage which includes the cash wage only, without deduction on account of facilities provided by the employer. (Art. 90) Q: In lieu of OT pay, the employee was given permission to go on leave on some other day, is that valid? A: No. Permission given to the employee (Ee) to go on leave on some other day of the week shall NOT exempt the employer from paying the additional compensation required because it would prejudice the Ee, for he will be deprived of the additional pay for the OT work he has rendered and which is utilized to offset the undertime he may have incured. Undertime could be charged against the Ees accrued leave. Q: Socorro is a clerk‐typist in the Hospicio de San Jose, a charitable institution dependent for its existence on contributions and donations from well wishers. She renders work 11 hours a day but has not been given OT pay since her place of work is a charitable institution. Is Socorro entitled to OT pay? Explain briefly. A: Yes. Socorro is entitled to OT compensation. She does not fall under any of the exceptions to the coverage of Art. 82, under the provisions of hours of work. The Labor Code is equally applicable to non‐profit institutions. A covered Ee who works beyond 8 hours is entitled to OT compensation. (2002 Bar Question) Q: Flores applied for the position of driver in the motor‐pool of Gold Company, a multinational corporation. Danilo was informed that he would frequently be working OT as he would have to drive for the company's executives even beyond the ordinary 8‐hour work day. He was provided with a contract of employment wherein he would be paid a monthly rate equivalent to 35 times his daily wage, regular sick and vacation leaves, 5 day‐ leave with pay every month and time off with pay


LABOR STANDARDS when the company's executives using the cars do not need Danilo's service for more than eight hours a day, in lieu of OT. Are the above provisions of the contract of employment in conformity with, or violative of, the law? A: Except for the provision that Danilo shall have time off with pay when the company's executives using the cars do not need Danilo's service for more than 8 hours a day, in lieu of OT, the provisions of the contract of employment of Danilo are not violative of any labor law because they instead improve upon the present provisions of pertinent labor laws. Q: May an employee be compelled to render OT work? A: GR: No. OT work is voluntary. XPN: Compulsory OT work in any of the following situations: 1.

2. 3.

4. 5.

6. 7.

Urgent work to be performed on machines and installations in order to avoid serious loss or damage to the Er or some other cause of similar nature Work is necessary to prevent loss or damage to perishable goods In case of imminent danger to the public safety due to an actual or impending emergency in the locality caused by serious accidents, fire, flood, typhoon, earthquake, epidemic or other disaster or calamity Country is at war Completion or continuation of the work started before the 8th hour is necessary to prevent serious obstruction or prejudice to the business operations of the Er Any other national or local emergency has been declared Necessary to prevent loss of life or property.

Note: There should be payment of additional compensation. Ees refusal to obey the order of the Er constitutes insubordination for which he may be subjected to disciplinary action.

Q: The employment contract requires work for more than 8 hours a day with a fixed wage inclusive of OT pay. Is that valid?

2.

(a)Undertime not offset by Overtime Q: Can undertime (UT) offset OT? A: Where a worker incurs undertime hours during his regular daily work, said undertime hours should not be offset against the overtime hours on the same day or on any other day. It is both prohibited by the statute and by jurisprudence. (b)Waiver of Overtime pay Q: Can the right to OT pay be waived? A: GR: The right to OT pay cannot be waived as it is governed by law and not merely by the agreement of the parties. XPN: 1. If the waiver is done in exchange for certain valuable benefits and privileges, which may even exceed the OT Pay, waiver may be permitted. 2. Compressed work week g.Nightwork Q: What is nightwork? A: Any and all work rendered between 6:00 pm and 6:00 am. (National Rice & Corn Corp. v. NARIC, 105 Phil 891) Q: What is night work prohibition with regard to women workers? A: GR: No woman regardless of age shall be employed or permitted to work, with or without compensation in any: 1.

A: It depends. 1.

When the contract of employment requires work for more than 8 hours at

specific wages per day, without providing for a fixed hourly rate or that the daily wages include OT pay, said wages cannot be considered as including OT compensation. (Manila Terminal Co. vs. CIR, et al., 91 Phil., 625) However, the employment contract may provide for a “built‐in” OT pay. Because of this, non‐payment of OT pay by the employer is valid. (Eng’g Equipment vs. Minister of Labor, G.R. No. L‐64967, Sep. 23, 1985)

2.

Industrial undertaking or branch thereof between 10pm and 6am of the following day. Commercial or non‐industrial undertaking or branch thereof, other than agricultural,

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3.

between midnight and 6am of the following day. Agricultural undertaking at nighttime unless she is given period of rest not less than 9 consecutive hours.

XPNS: 1. Actual or impending emergencies a. Caused by serious accident, fire, flood, typhoon, earthquake, epidemic, other disasters, or calamity b. To prevent loss of life or property or c. In case of force majeure or d. Imminent danger to public safety 2. Urgent work a. To be performed on machineries, equipment or installations, b. To avoid serious loss which the Er would otherwise suffer 3. Work is necessary to prevent serious loss to perishable goods 4. Woman Ees a. Holds a responsible position of managerial or technical nature, or b. Has been engaged to provide health and welfare services 5. Nature of the work a. Requires the manual skill and dexterity of women workers and b. The same cannot be performed with equal efficiency by male workers 6. Women Ees are immediate members of the establishment or undertaking 7. In analogous cases exempted by the SLE in appropriate regulations. (Art. 131) Note: The operation of Call Contract Centers which provides offshore case solutions to US based clients who phone in to conduct product inquiries and technical support, operating for 24/7, has been exempted from the prohibition considering the inevitable time difference between the US and the Phils. and the peak time for its operation is between 8:00 pm to 10:00 am Manila time, thereby making it necessary for 80% of its Ees, including women, to work during graveyard shift. (BWC‐WHSD Opinion No. 491, s. 2003)

Q: What is night shift differential (NSD)? A: It is additional compensation of not less than 10% of an Ees regular wage for every hour worked between 10:00 pm to 6:00 am, whether or not such period is part of the worker’s regular shift. Q: Who are entitled to NSD? A: GR: NSD applies to all employees (Ees).

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XPN: 1. Ees of the Gov’t and any of its political subdivisions, including GOCC’s. 2. Retail and service establishments regularly employing not more than 5 workers. 3. Includes task and contract basis 4. Domestic helpers and persons in the personal service of another. 5. Field personnel and Ees whose time and performance is unsupervised by the employer 6. Managerial Ees Q: May an employee waive the right to NSD? A: GR: No, such waiver is against public policy. (Mercury Drug Co., Inc. vs. Dayao, et al., G.R. No. L‐30452, Sep. 30, 1982) XPN: Higher/better benefits h.CBA provision vis‐à‐vis overtime work Q: May the overtime rate be subject to stipulation of the Ee and Er? A: Generally, the premium for work performed on the employee’s rest days or on special days or regular holidays are included as part of the regular rate of the employee in the computation of overtime pay for any overtime work rendered on said days especially if the employer pays only the minimum overtime rates prescribed by law. The employees and employer, however, may stipulate in their collective agreement the payment of overtime rates higher than those provided by law and exclude the premium rates in the computation of overtime pay. Such agreement may be considered valid only if the stipulated overtime pay rates will yield to the employees not less than the minimum prescribed by law. 2.WAGES Q: What is a wage? A: It is the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, payable by an employer (Er) to an employee (Ee) under a written or unwritten contract of employment: 1.

For work done or to be done, or for services rendered or to be rendered; and includes


LABOR STANDARDS 2.

Fair and reasonable value of board, lodging, or other facilities customarily furnished by the Er to the Ee as determined by SLE.

Q: What do you mean by customary? A: It is founded on long‐established and constant practice connoting regularity. Q: What do you mean by fair and reasonable value? A: It shall not include any profit to the employer (Er) or to any person affiliated with the Er. a.No work, No pay principle Q: What does a “fair day’s wage for a fair day’s labor “mean (no work no pay)? A: GR: If there is no work performed by the Ee, without the fault of the Er, there can be no wage or pay. XPN: The laborer was able, willing and ready to work but was: 1. Prevented by management; 2. Illegally locked out; 3. Illegally suspended; 4. Illegally dismissed 5. Otherwise illegally prevented from working. (Aklan Electric Coop. v. NLRC, G.R. No. 129246, Jan. 25, 2000) b.Coverage and Exclusions Q: To whom does the title on wages apply? A: GR: It applies to all employees XPN: 1. Farm tenancy or leasehold; 2. Household or domestic helpers, including family drivers and persons working in the personal service of another; 3. Home workers engaged in needlework or in any cottage industry duly registered in accordance with law; 4. Workers in duly registered cooperatives when so recommended by the Bureau of Cooperative Development and upon approval of the Secretary of Labor and Employment. 5. Workers of a barangay micro business enterprise (R.A. 9178)

c.Facilities and Supplements Q: Distinguish between facilities and supplement A: FACILITIES Items of expenses necessary for the laborer’s and his family’s existence and subsistence Note: Does not include tools of trade or articles / services primarily for the benefit of the Er or necessary to the conduct of the Er’s business.

Forms part of the wage Deductible from wage For the benefit of the worker and his family.

SUPPLEMENT Extra remuneration or special privileges or benefits given to or received by the laborers over and above their ordinary earnings or wages (Atok Big Wedge Mining Co. v. Atok Big Wedge Mutual Benefit Assoc, G.R. No. L‐7349, July 19, 1955) . Independent of wage Not wage deductible Granted for the convenience of the Er.

Q: What is the criterion in determining whether an item is a supplement or facility? A: The criterion is not so much with the kind of the benefit or item (food, lodging, bonus or sick leave) given, but its purpose. (State Marine v. Cebu Seamen’s Ass’n., G.R. No. L‐12444, Feb. 28, 1963) Q: When can the cost of facilities furnished by the Er be charged against an Ee? A: In order that the cost be charged against the Ee, the latter’s acceptance of such facilities must be voluntary. Q: What are the requirements for deducting values for facilities? A: 1. 2. 3.

Proof must be shown that such facilities are customarily furnished by the trade The provision of deductible facilities must be voluntarily accepted in writing The facilities must be charged at fair and reasonable value (Mabeza v. NLRC, G.R. No. 118506, April 18, 1997)

Q: Are food and lodging, or the electricity and water consumed by a hotel worker, considered facilities? A: No. These are supplements. Considering, therefore, that hotel workers are required to work different shifts and are expected to be available at various odd hours, their ready availability is a necessary matter in the operations of a small hotel. Furthermore, granting that meals and lodging were

31


UST GOLDEN NOTES 2011 provided and indeed constituted facilities, such facilities could not be deducted without the Er complying first with certain legal requirements. (Mabeza v. NLRC, G.R. No. 118506, April 18, 1997) d.Wages v. Salaries Q: Distinguish between wage and salary? A:

WAGE SALARY (Gaa vs.CA, G.R. No. 44169, Dec. 3, 1985) Paid to “white collared Compensation for manual workers” and denotes labor (skilled or unskilled) higher degree of also known as “blue employment or a collared workers”, paid at superior grade of services stated times and and implies a position in measured by the day, office. week, month or season. Considerable pay for a Out gesture of a larger lower and less and more important responsible character of service employment. GR: Not subject to execution Subject to execution. XPN: Debts incurred for food, shelter, clothing and medical attendance.

e.Wage Distortion Q: What is wage distortion (WD)? A: A situation where an increase in wage results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among the Ee‐groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service or other logical bases of differentiation. Q: What are the elements of WD? A: 1. An existing hierarchy of positions with corresponding salary rates. 2. A significant change or increase in the salary rate of a lower pay class without a corresponding increase in the salary rate of a higher one; 3. The elimination of the distinction between the 2 groups or classes; and 4. The WD exists in the same region of the country. (Alliance Trade Unions v. NLRC, G.R. No. 140689, Feb. 17, 2004) Q: Is the Er legally obliged to correct WD?

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A: The Er and the union shall negotiate to correct the distortions. If there is no union, the Er and the workers shall endeavor to correct such distinctions. Q: What are the basic principles in WD? A: 1. The concept of WD assumes an existing group or classification of Ees which establishes distinctions among such Ees on some relevant or legitimate basis. This classification is reflected in a differing wage rate for each of the classes of Ees 2. Often results from gov’t decreed increases in minimum wages. 3. Should a WD exist, there is no legal requirement that, in the rectification of that distortion by re‐adjustment of the wage rates of the differing classes of Ees, the gap which had previously or historically existed be restored in precisely the same amount. In other words, correction of a WD may be done by reestablishing a substantial or significant gap (as distinguished from the historical gap) between the wage rates of the differing classes of Ees. 4. The re‐establishment of a significant difference in wage rates may be the result of resort to grievance procedures or collective bargaining negotiations. (Metro Transit Org., Inc. v. NLRC, G.R. No. 116008, July 11, 1995) Q: Distinguish the process for correction of WD of organized establishments and unorganized establishments? A: Organized Establishment (with union) The Er and the union shall negotiate to correct distortion. Any dispute shall be resolved through a grievance procedure under the CBA. If it remains unresolved, it shall be dealt with through voluntary arbitration. The dispute will be resolved within 10 days from the time the dispute was referred to voluntary arbitration.

Unorganized Establishments (without union) The Er and the workers shall endeavor to correct the distortion. Any dispute shall be settled through the NCMB. If it remains unresolved within 10 days it shall be referred to the NLRC. The NLRC shall conduct continuous hearings and decide the dispute within 20 days from the time the same was referred.


LABOR STANDARDS Q: Can the issue of WD be raised in a notice of strike? A: No. WD is non‐strikeable. (Ilaw at Buklod ng Manggagawa v. NLRC, G.R. No. 91980, June 27, 1991.) WD is neither a deadlock in collective bargaining nor ULP. f.CBA provision vis‐à‐vis Wage Order CBA Credibility Q: Distinguish CBA and Wage Order. A: CBA Not an ordinary contract. It can be entered into only by an exclusive bargaining agent or unit. If the CBA provides better benefits then the employees shall be entitled to the same.

WAGE ORDER Administrative issuance which results from a statute (RA 6727)

Only sets the minimum

Q: Can a CBA provision regarding wages prevail over a Wage Order?

Moreover, compliance with a collective bargaining agreement is mandated by the expressed policy to give protection to labor. Unless otherwise provided by law, said policy should be given paramount consideration. (Meycauayan College v. DRILON, G.R. No. 81144, My 7, 1990). g.Non‐ diminution of benefits Q: What is the concept of non‐diminution (ND) of benefits? A: GR: Benefits being given to employees (Ees) cannot be taken back or reduced unilaterally by the employer (Er) because the benefit has become part of the employment contract, whether written or unwritten. XPN: To correct an error, otherwise, if the error is not corrected for a reasonable time, it ripens into a company policy and Ees can demand it as a matter of right. Q: When is ND of benefits applicable? A: It is applicable if it is shown that the grant of benefit:

A: Yes, where the CBA provides a wage or salary to be received by the employees which is more than the amount set by the Wage Order, whether issued prior to or after the conclusion of the CBA, it is incumbent upon the employer to compensate the employees according to the provisions of the CBA with respect to wages. Q: Meycauayan College Faculty and Personnel Association as the employees union in Meycauayan College, admits that its members were paid all the increases in pay as mandated law. It appears however that in 1987, shortly after union President Joy Bugo turned over the presidency, she discovered that Art. IV of the CBA, which provides for higher salary increase was not implemented. May the union claim the difference between their old salaries and those provided by said CBA provision? A: Yes, the terms and conditions of a collective bargaining contract constitute the law between the parties. Beneficiaries thereof are therefore, by right, entitled to the fulfillment of the obligation prescribed therein. Consequently, to deny binding force to the CBA would place a premium on a refusal by a party thereto to comply with the terms of the agreement. Such refusal would constitute an unfair labor practice.

1. 2.

Is based on an express policy of the law; or Has ripened into practice over a long period of time and the practice is consistent and deliberate and is not due to an error in the construction/ application of a doubtful or difficult question of law.

h.Worker’s preference in case of bankruptcy Q: What is bankruptcy? A: “Bankruptcy” is referred to in the Philippines as “Insolvency”. It denotes the state of an entity or person that has liabilities greater than its assets. Q: What happens if the Er business experiences bankruptcy or liquidation? A: His workers shall enjoy first preference as regards their wages and monetary claims, any provision of the law to the contrary notwithstanding. Q: What are the principles underlying the preference? A:

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2. 3.

4.

Declaration of bankruptcy or judicial liquidation before enforcement of the worker’s preferential right; Filing of claims by workers; The right does not constitute a lien to the property of the insolvent debtor in favor of workers. (DBP vs. NLRC, G.R. No. 82763 Mar. 19, 1990 and G.R. No. 97176, Mar. 18, 1993); The preference in favor of the Ees applies to discharge of funds. The preference does not only cover unpaid wages, it also extends to termination pay and other monetary claims; Note: Termination pay, after all, is considered as additional remuneration for services rendered to the employer for a certain period of time; it is computed on the basis of length of service. (PNB vs. Cruz, G.R. No. 80593, Dec. 18, 1989)

5.

Applicable only to ordinary preferred credit, hence, must yield to special preferred credits. Q: Are workers preferred than the tax claims of the Gov’t? A: No. Art. 110 did not sweep away the overriding preference accorded under the scheme of the Civil Code to tax claims of the government. Q: Is worker preference applicable if the Er corporation is under rehabilitation? A: No. Suspension of payments order by the SEC mandates the holding in abeyance the filing or the proceedings on labor cases against an Er who is under rehabilitation to give the Er the chance to concentrate on how to revive his business and not be distracted in trying to defend itself in labor cases filed against it. (Rubberworld, Inc. v. NLRC, G.R. No. 126773, April 14, 1999) Q: Premiere Bank, being the creditor‐mortgagee of XYZ & Co., a garment firm, foreclosed the hypothecated assets of the latter. Despite the foreclosure, XYZ & Co. continued its business operations. A year later, the bank took possession of the foreclosed property. The garment firm's business operations ceased without a declaration of bankruptcy. Caspar, an employee of XYZ & Co., was dismissed from employment due to the cessation of business of the firm. He filed a complaint against XYZ & Co. and the bank. The Labor Arbiter, after hearing, so found the company liable, as claimed by Caspar, for separation pay. Premiere Bank was additionally found subsidiarily liable upon the thesis that the satisfaction of labor benefits due to the Ee is superior to the right of a

34

mortgagee of property. Was the Labor Arbiter correct in his decision? A: No. The preference of credits established in Art. 110 of the LC cannot be invoked in the absence of any insolvency proceedings, declaration of bankruptcy, or judicial liquidation. (DBP v. Santos, G.R. No. 75801, March 20, 1991). (2003 Bar Question) Q: Distinguish the mortgage created under the Civil Code from the right of 1st preference created by the LC as regards the unpaid wages of workers. Explain. A: A mortgage directly subjects the property upon which it is imposed, whoever the possessor may be, to the fulfillment of the obligation for which it was constituted. It creates a real right which is enforceable against the whole world. It is therefore a lien on an identified real property. Mortgage credit is a special preferred credit under the Civil Code in the classification of credits. The preference given by the LC when not attached to any specific property is an ordinary preferred credit. (1995 Bar Question) i.Labor Code provisions for wage protection Q: What are the Labor Code provisions for wage protection A: Art. 112. Non‐Interference in Disposal of Wages‐No employer shall limit or otherwise interfere with the freedom of any employee to dispose of his wages. He shall not in any manner force, compel or oblige his employees to purchase merchandise, commodities or other properties from the employer or from any other person, or otherwise make use of any store or service of such employer or any other person. Art. 113 Wage Deduction‐No employer in his own behalf or in behalf of any person, shall make any deduction from the wages of his employees, except: (a) In cases where the worker is insured with his consent by the employer, and the deduction is to recompense the employer for the amount paid by him as premium on the insurance; (b) For union dues, in cases where the right of the worker or his union to check‐ off has been recognized by the employer or authorized in writing by the individual worker concerned; and


LABOR STANDARDS (c) In cases where the employer is authorized by law or regulations issued by the Secretary of Labor. Art. 114 No employer shall require his worker to make deposits from which deductions shall be made for the reimbursement of loss of or damage to tools, materials or equipments supplied by the employer; except when the employer is engaged in such trades, occupations or business where the practice of making deductions or requiring deposits is a recognized one, or is necessary, or desirable as determined by the Secretary of Labor in appropriate rules and regulations. Art. 115 Limitations‐No deduction from the deposits of an employee for the actual amount of the loss or damage shall be made unless the employee has been heard thereon, and his responsibility has been clearly shown. Art 116 Withholding of Wages and Kickbacks Prohibited‐It shall be unlawful for any person, directly or indirectly, to withhold any amount from the wages of a worker or induce him to give up any part of his wages by force, stealth, intimidation, threat or by any other means whatsoever without the worker’s consent. Art 117 Deduction to Ensure Employment‐It shall be unlawful to make any deduction from the wages of any employee for the benefit of the employer or his representative or intermediary as consideration of a promise of employment or retention in employment or retention in employment. Art. 118 Retaliatory Measures‐It shall be unlawful for an employer to refuse to pay or reduce the wages and benefits, discharge or in any manner discriminate against any employee who has filed any complaint instituted any proceeding under this Title or has testified or is about to testify in such proceedings. j. Allowable deductions without employee’s consent Q: What is the rule in wage deductions? A: GR: It is strictly prohibited XPN: 1. Deductions under Art. 113 for insurance premiums 2. Union dues in cases where the right of the worker or his union to check off has been recognized by the employer (Er) or authorized in writing by the individual

worker concerned (Art. 113). Art. 241(o) provides that special assessments may be validly checked‐off provided that there is an individual written authorization duly signed by every employee (Ee). 3. Deductions for SSS, Medicare and Pag‐ibig premiums 4. Taxes withheld pursuant to the Tax Code 5. Deductions under Art. 114 for loss or damage to tools, materials or equipments 6. Deductions made with the written authorization of the Ee for payment to a third person. (Sec 13, Rule VIII, Book III of the IRR) 7. Deductions as disciplinary measures for habitual tardiness (Opinion dated March 10, 1975 of the SLE) 8. Agency fees under Art. 248(e) 9. Deductions for value of meals and facilities freely agreed upon 10. In case where the Ee is indebted to the Er where such indebtedness has become due and demandable. (Art. 1706, Civil Code) 11. In court awards, wages may be subject of execution or attachment, but only for debts incurred for food, shelter, clothing, and medical attendance. (Art. 1703, Civil Code) 12. Salary deduction of a member of a legally established cooperative. (R.A. 6938, Art. 59) k.Attorney’s fees Q: What are the limitations to the assessment of attorney’s lien against the culpable party? A: 1.

2.

In case of unlawful withholding of wages – 10% of the amount of wages to be recovered. It shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings for the recovery of wages, atty’s fees that exceed 10% of the amount of wages recovered.

Note: The prohibition on atty’s lien refers to proceedings for recovery of wages and not to services rendered in connection with CBA negotiations. In the latter case, the amount of atty’s fees may be agreed upon by the parties and the same is to be charged against union funds as provided for in Art. 222 of the Labor Code. (Pacific Banking Corp.v. Clave, G.R. No. 56965, Mar. 7, 1984)

Q: What is ordinary attorney’s fee?

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UST GOLDEN NOTES 2011 A: It is the reasonable compensation paid to a lawyer by his client for the legal services he has rendered. Q: What is extraordinary attorney’s fee? A: It is the indemnity for damages ordered by the court to be paid by the losing party in litigation and is not to be paid to the lawyer but to the client, unless they have agreed that the award shall pertain to the lawyer as an additional compensation or as a part thereof. (Traders Royal Bank Ee’s Union‐Independent v. NLRC, G.R. No. 120592, Mar. 14, 1997) Note: Art.111 of the LC deals with the extraordinary concept of attorney’s fees. It may not be used as the standard in fixing the amount payable to the lawyer by his client for the legal services he rendered. (Masmud v. NLRC, G.R. No. 183385, Feb. 13, 2009)

Q: Santiago, a project worker, was being assigned by his Er, Bagsak Builders, to Laoag, Ilocos Norte. Santiago refused to comply with the transfer claiming that it, in effect, constituted a constructive dismissal because it would take him away from his family and his usual work assignments in Metro Manila. The Labor Arbiter (LA) found that there was no constructive dismissal but ordered the payment of separation pay due to strained relations between Santiago and Bagsak Builders plus atty’s fees equivalent to 10% of the value of Santiago's separation pay. Is the award of atty's fees valid? State the reasons for your answer. A: No, the award of atty’s fees is not valid. According to the LC (Art. 111 [a]), atty’s fees may be assessed in cases of unlawful withholding of wages which does not exist in the case. The worker refused to comply with a lawful transfer order, and hence, a refusal to work. Given this fact, there can be no basis for the payment of atty's fees. Could the LA have validly awarded moral and exemplary damages to Santiago instead of atty's fees? Why? A: No, moral and exemplary damages can be awarded only if the worker was illegally terminated in an arbitrary or capricious manner. (Nueva Ecija Electric Cooperative Inc., Ees’ Ass’n., vs. NLRC, G.R. No. 116066, Jan. 24, 2000; Cruz vs. NLRC, G.R. No. 116384, Feb. 7, 2000; Phil. Aeolus etc., vs. NLRC, G.R. No. 124617, April 28, 2000). (2001 Bar Question)

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Q: When can attorney’s fees and damages be awarded in an illegal dismissal case? A: For attorney’s fees, moral and exemplary damages to be granted, the plaintiff must prove that the facts of his case fall within the enumerated instances in the Civil Code. Thus, moral damages may only be recovered where the dismissal or suspension of the employee was attended by bad faith or fraud, or constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs or public policy. In other words, the act must be a conscious and intentional design to do a wrongful act for a dishonest purpose or some moral obliquity. Exemplary damages, on the other hand, may only be awarded where the act of dismissal was effected in a wanton, oppressive or malevolent manner. (Chaves v. NLRC,G.R. No. 166382, June 27, 2006) Q: What is union service fee? A: The appearance of labor federations and local unions as counsel in labor proceedings has been given legal sanction under Art.222 of the LC, which allows non‐lawyers to represent their organization thereof. The said labor federations and local unions have a valid claim to atty’s fees which is called the Union Service Fee. l.Criteria/ Factors for Wage Setting Q: What are the standards or criteria for minimum wage setting? A: In the determination of such regional minimum wages, the Regional Board shall, among other relevant factors consider the following: a) b)

The demand for living wages Wage adjustment vis‐a‐vis the consumer price index c) The cost of living and changes or increases therein d) The needs of workers and their families e) The need to induce industries to invest in the countryside f) Improvements in standards of living g) The prevailing wage levels h) Fair return of the capital invested and capacity to pay of employers i) Effects on employment generation and family income j) The equitable distribution of income and wealth along the imperatives of economic and social development Q: What is salary ceiling method?


LABOR STANDARDS A: A method of minimum wage adjustment whereby the wage adjustment is applied to Ees receiving a certain denominated ceiling. In other words, workers already being paid more than the existing minimum wage are also to be given a wage increase. (ECOP v. NWCP, G.R. No. 96169, Sep. 24, 1991) Q: What is a floor wage method? A: It involves the fixing of a determinate amount to be added to the prevailing statutory minimum wage rates. Q: The Regional Wage Board of Region II issued a Wage Order granting all Ees in the private sector throughout the region an across‐the‐board increase of P15.00 daily. Is this Wage Order valid? A: The Wage Order is valid insofar as the mandated increase applies to Ees earning the prevailing minimum wage rate at the time of the passage of the Wage Order and void with respect to its application to Ees receiving more than the prevailing minimum wage rate at the time of the passage of the Wage Order. Pursuant to its authority, the Regional Wage Boards may issue wage orders which set the daily minimum wage rates. In the present case, the Regional Wage Board did not determine or fix the minimum wage rate. It did not set a wage level nor a range to which a wage adjustment or increase shall be added. Instead, it granted an across‐the‐board wage increase of P15.00 to all Ees in the region. In doing so, the Regional Wage Board exceeded its authority by extending the coverage of the Wage Order to wage earners receiving more than the prevailing minimum wage rate, without a denominated salary ceiling. The Wage Order granted additional benefits not contemplated by R.A. No. 6727. (MBTC v NWPC Commission, G.R. No. 144322, Feb. 6, 2007) Q: Since the Wage Order was declared void with respect to its application to employees receiving more than the prevailing minimum wage rate at the time of the passage of the Wage Order, should these Ees refund the wage increase received by them? A: No. The Ees should not refund the wage increase that they received under the invalidated Wage Order. Being in good faith, the employees need not refund the benefits they received. Since they received the wage increase in good faith, in the honest belief that they are entitled to such wage increase and without any knowledge that there was no legal basis for the same, they need not refund the wage increase that they already received.

(MBTC v NWPC Commission, G.R. NO. 144322, Feb. 6, 2007) 3.REST DAY a.Right to weekly rest day, Preferemce of the employee, when work on rest day authorized Q: What is the right to weekly rest day (WRD)? A: Every employer shall give his employees a rest period of not less than 24 consecutive hours after every 6 consecutive normal work days. (Sec. 3, Rule III, Book III, IRR) Q: What is the scope of WRD? A: It shall apply to all employers whether operating for profit or not, including public utilities operated by private persons. (Sec. 1, Rule III, Book III, IRR) Q: Who determines the WRD? A: GR: Er shall determine and schedule the WRD of his Ee. XPNs: 1. CBA 2. Rules and regulations as the SLE provides 3. Preference of employee (Ee) based on religious grounds – Ee shall make known his preference in writing at least 7 DAYS before the desired effectivity of the initial rest day so preferred. (Sec. 4(1), Rule III, Book III, IRR) XPN to XPN no. 3: Employer (Er) may schedule the WRD of his choice for at least 2 days in a month if preference of the employee will inevitably result in: a. serious prejudice to the operations of the undertaking and b. the Er cannot normally be expected to resort to other remedial measures. (Sec. 4(2), Rule III, Book III, IRR) Q: When should employees (Ees) be informed of their schedule of WRD? A: Er shall make known rest period by means of: 1. Written notice 2. Posted conspicuously in the workplace 3. At least 1 week before it becomes effective. (Sec.5, Rule III, Book III. IRR) Q: Can an Ee be compelled to work on his rest day?

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UST GOLDEN NOTES 2011 A: GR: No. XPN: 1. Urgent work to be performed on the machinery, equipment or installation, to avoid serious loss which the Er would otherwise suffer; 2. Nature of work requires continuous operations for 7 days in a week or more and stoppage of the work may result in irreparable injury or loss to the Er; 3. Abnormal pressure of work due to special circumstances, where the Er cannot be ordinarily expected to resort to other measures; 4. Actual or impending emergencies (serious accident, fire, flood, typhoon, earthquake, etc.) 5. Prevent loss or damage to perishable goods; 6. Analogous or similar circumstances as determined by the SLE; 7. Work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon. Q. What is the rule when an Ee volunteers to work on his rest day under other circumstances? A: He shall express it in writing subject to additional compensation. (Sec. 6[2], Rule III, Book III, IRR) Q: What is premium pay? A: It is the additional compensation for work rendered by the employee on days when normally he should not be working such as special holidays and weekly rest days. Q: Can the Er and Ee agree on the rate of premium pay other than that provided by law? A: Yes. Nothing shall prevent the Er and his Ee or their representatives from entering into any agreement with terms more favorable to the Ees Provided: It shall not be used to diminish any benefit granted to the Ees under existing laws, agreements and voluntary Er practices. (Sec. 9, Rule III, Book III, IRR) Q: What are the rates of compensation for rest day, Sunday or holiday work? A: RATES OF ADDITIONAL COMPENSATION

INSTANCES

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Work on a scheduled rest day Work has no regular workdays and rest days (If performed on Sundays and Holidays) Work on a Sunday (If Ee’s scheduled rest day)

Work performed on any Special Holiday

Work performed on a Special Holiday and same day is the scheduled rest day

Work performed on a Special Working Holiday

+ 30% Premium Pay (PP) of 100% regular wage (RW). (Sec. 7, Rule III, Book III, IRR) + 30% PP of 100% RW . (Sec. 7, Rule III, Book III, IRR + 30% PP of 100% RW. (Sec. 7, Rule III, Book III, IRR) 1st 8 hrs: + 30% PP of 100% RW Excess of 8 hrs: + 30% of hourly rate on said date. (M.C. No. 10, Series of 2004) 1st 8 hrs: + 50% PP of 100% regular wage Excess of 8 hrs: + 30% of hourly rate on said date. (M.C. No. 10, Series of 2004) Ee is only entitled to his basic rate. No PP is required. Reason: Work performed is considered work on ordinary working days. (Sec. 7, Rule III, Book III, IRR)

Note: Holiday work provided under Art.93 pertains to special holidays or special days.

Q: Jose applied with Mercure Drug Company for the position of Sales Clerk. Mercure Drug Company maintains a chain of drug stores that are open everyday till late at night. Jose was informed that he had to work on Sundays and holidays at night as part of the regular course of employment. He was presented with a contract of employment setting forth his compensation on an annual basis with an express waiver of extra compensation for work on Sundays and holidays, which Jose signed. Is such a waiver binding on Jose? Explain. A: As long as the annual compensation is an amount that is not less than what Jose should receive for all the days that he works, plus the extra compensation that he should receive for work on his weekly rest WRD and for night differential pay for late night work, considering the laws and wage orders providing for minimum wages, and the pertinent provisions of the LC, then the waiver that Jose signed is binding on him for he is not really waiving any right under Labor Law. It is not contrary


LABOR STANDARDS to law, morals, good customs, public order or public policy for an Er and Ee to enter into a contract where the Ees compensation that is agreed upon already includes all the amounts he is to receive for OT work and for work on weekly rest days and holidays and for night differential pay for late night work. (1996 Bar Question) 4.HOLIDAYS a.Right to Holiday Pay

holidays.

REGULAR HOLIDAYS New Year’s Day Maundy Thursday Good Friday Eid’l Fitr Araw ng Kagitingan Labor Day Independence Day

A: It is a premium given to employees (Ees) pursuant to law even if he has not been suffered to work on a regular holiday. It is limited to the 11 regular holidays, also called legal holidays listed by law. The employee (Ee) should not have been absent without pay on the working day preceeding the regular holiday. Q: What are the classes of special days (SD)? A: 1. National Special Public Holiday GR: Non working days XPN: Otherwise declared by the President 2. Local Special Public Holiday – Regular working day. (LOI 814 as amended by LOI 1087) DATE November 1 December 31 August 21 December 24 February 25 e.g. Manila day (in Manila only)

Q: What are regular holidays (RH)? A: They are compensable whether worked or unworked subject to certain conditions. They are also called legal holidays. The following are

(Presidential

DATE January 1 April 21 April 22 Movable Date April 9 May 1 June 12 Aug. 29 (last Monday of August) Nov. 30 December 25 Dec. 30

National Heroes Day

Q: What is holiday pay (HP)?

NATIONAL SPECIAL DAYS All Saints Day Last Day of the Year Ninoy Aquino Day Other days declared by law 1. Special Non‐working days 2. Special Public Holidays 3. Special National Holiday 4. Special Holiday ( for all schools) a. Edsa Revolution Anniversary LOCAL SPECIAL DAYS Those declared by: 1. Law or 2. Ordinance

considered regular Proclamation No. 18)

Bonifacio Day Christmas Day Rizal Day

Note: RA 9492 has already been superseded by Presidential Proclamation No. 18 issued by President Benigno C. Aquino III placing the observance of regular holidays and national special days according to their respective dates in the calendar.

Q: What are Muslim Holidays (MH)? A: The MHs, except Eid’l Fitr, are observed in specified Muslim areas. All private corporations, offices, agencies and entities or establishments operating within the designated Muslim provinces and cities are required to observe MH. Q: When shall Eid’l Fitr and/or Eid’l Adha be declared a national holiday? A: The proclamation declaring a national holiday for the observance of Eid’l Fitr and/or Eid’l Adha shall be issued: 1.

After the approximate date of the Islamic holiday has been determined in accordance with the: a. Islamic Calendar (Hijra) or b. Lunar Calendar or c. Upon astronomical calculations d. Whichever is possible or convenient 2. The Office of Muslim Affairs shall inform the Office of the President on which day the holiday shall fall. (Sec.2, Proc. No. 1841) Q: Can a Christian employee (Ee) working within the Muslim area be compelled to work during MH? A: No. Christians working within the Muslim areas may not report for work during MH. Not only Muslim but also Christian Ee in the designated provinces and cities are entitled to HP on the MH. (SMC v. CA, G.R. 146775, Jan. 30, 2002)

39


UST GOLDEN NOTES 2011 Q: Can a Muslim Ee working outside the Muslim area be compelled to work during the observance of the MH? A: GR: No. Muslim Ees shall be excused from work during MH without diminution of salary or wages. XPN: Those who are permitted or suffered to work on MH are entitled to at least 100% basic pay + 100% as premium of their basic pay. (SMC v. CA, G.R. No. 146775, Jan. 30, 2002) Note: RH falling within temporary or periodic shutdown and temporary cessation of work are compensable. However, if the temporary or periodic shutdown and cessation of work is due to business reverses, the employer may not pay the RHs during such period.

Q: Distinguish RH from SD. A: REGULAR HOLIDAY SPECIAL HOLIDAY If Unworked Regular pay (subject to certain No Pay conditions for daily paid Ee’s) If worked + 30% premium pay of 2x regular pay (200%) 100% regular wage Other matters Set by law Set by proclamation Limited to those provided Not exclusive under Art. 94, LC

Q: Who are entitled to HP? A: GR: All employees (Ees) are entitled. (Sec.1, Rule IV, Book III, IRR) XPNS: 1. Gov’t Ees and any of its political subdivisions, including GOCCs (with original charter) 2. Retail and service establishments regularly employing less than 10 workers 3. Domestic helpers and persons in the personal service of another 4. Ee engaged on task or contract basis or purely commission basis 5. Members of the Family of the Er who are dependent on him for support 6. Managerial Ee and other member of the managerial staff 7. Field personnel and other Ee whose time and performance are unsupervised by the Er

40

8.

Ee paid fixed amount for performing work irrespective of the time consumed in the performance thereof. (Sec. 1, Rule IV, Book III, IRR) Q: What are retail establishments? A: They are engaged in the sale of goods to end users for personal or household use. (e.g. Grocery) Q: What are service establishments? A: They are engaged in the sale of services to individuals for their own or household use. (e.g. TV repair shop) Q: Is an exercise of profession retail or service? A: It is neither retail nor service. Q: May an Er require an Ee to work on RH? A: Yes. But Ee shall be compensated twice his regular rate. Q: What are the rates of compensation for RH on Ees regular workday and RH on Ees rest day? A: FORMULAS TO COMPUTE WAGES ON REGULAR HOLIDAYS (RH) (M.C.No.10, Series of 2004) RH on Ee’s regular RH on Ee’s rest day workday If unworked 100% 100% e.g. 300 Php regular wage e.g. 300 Php (RW) (RW) If worked (1st 8 hrs) + 30% of 200% 200% e.g 600(200% of RW) e.g. 300(RW) X 0.3 + 300 180 600 = Total Wage (TW) 180+600= 780 (TW) If worked (OT)(excess of 8 hrs) 230% 230% + 30% of hourly 200% + 30% of hourly rate rate on said date on said date

Q: What is an important condition that should be met in order to avail/receive the single HP? A: The Ee should not have been absent without pay on the working day preceding the RH.


LABOR STANDARDS Q: Distinguish between monthly paid and daily paid Ees. A: Monthly Paid Ees One who is paid his wage or salary for everyday of the month, including rest days, Sundays, regular or special days, although he does not regularly work on these days. Not excluded from benefit of HP.

Daily Paid Ees One who is paid his wage or salary only on those days he actually worked, except in cases of regular or special days, although he does not regularly work on these days.

Q: What is the effect if a legal holiday falls on a Sunday? A: A legal holiday falling on a Sunday creates no legal obligation for the Er to pay extra to the Ee who does not work on that day, aside from the usual HP to its monthly paid Ee. (Wellington v. Trajano, G.R. 114698, July 3, 1995) (1)In Case of Absences

cleaning of machineries compensated. is undertaken Due to business reverses RH may not be paid (cessation as authorized by by the Er the Sec. of Labor)

(3)Holiday Pay of Teachers, Piece workers, seafarers, seasonal workers Q: What are the HPs of certain employees? A: EMPLOYEES Private school teachers (Faculty members of colleges and universities) Ee paid by: 1. results or 2. output (Piece work payment)

Q: Discuss the concept of absences. Seasonal Workers

A: ABSENCES LOA with pay on the day LOA without pay on the immediatley preceding day immediately RH. preceding a RH. GR: An Ee may not be paid the required HP if he has not worked on such RH. XPN: Where the day immediately GR: All covered Ees are preceding the entitled to HP. holiday is a: 1. Non‐working day (NWD) in the establishment or 2. The scheduled rest day (RD) of the Ee.

(2)In Case of Temporary Cessation of Work Q: What is the effect in case there is a temporary or periodic shutdown and temporary cessation of work? A:

1. 2.

TEMPORARY OR PERIODIC SHUTDOWN and TEMPORARY CESSATION OF WORK (Sec. 7, Rule IV, Book III, IRR) Instances Rule: Yearly inventory or RH falling within the When the repair or period shall be

Workers having no regular work days Seafarers

RULE RH during semestral vacations Not entitled to HP 2. RH during Christmas vacation Shall be paid HP HP shall not be less than his average daily earnings for the last 7 actual work days preceding the RH. Provided: HP shall not be less than the statutory minimum wage rate. May not be paid the required HP during offseason where they are not at work. 1.

Shall be entitled to HP Shall be entitled to HP

Q: Are the school faculty who according to their contracts are paid per lecture hour entitled to unworked HP? A: 1. If during regular holiday – No. Art. 94 of LC is silent with respect to faculty members paid by the hour who because of their teaching contracts are obliged to work and consent to be paid only for work actually done (except when an emergency or a fortuitous event or a national need calls for the declaration of special holidays). RH specified as such by law are known to both school and faculty members as "no class days" certainly the latter do not expect payment for said unworked days, and this was clearly in their minds when they entered into the teaching contracts. (Jose Rizal College v. NLRC, G.R. No. 65482, Dec. 1, 1987) 2. If during special public holidays – Yes. The law and the IRR governing HP are silent as to payment on Special Public Holidays. It is readily apparent that the declared purpose of the HP which is the prevention of diminution of the monthly income of the Ees on account

41


UST GOLDEN NOTES 2011 of work interruptions is defeated when a regular class day is cancelled on account of a special public holiday and class hours are held on another working day to make up for time lost in the school calendar. Otherwise stated, the faculty member, although forced to take a rest, does not earn what he should earn on that day. Be it noted that when a special public holiday is declared, the faculty member paid by the hour is deprived of expected income, and it does not matter that the school calendar is extended in view of the days or hours lost, for their income that could be earned from other sources is lost during the extended days. Similarly, when classes are called off or shortened on account of typhoons, floods, rallies, and the like, these faculty members must likewise be paid, whether or not extensions are ordered. (Jose Rizal College v. NLRC, G.R. No. 65482, Dec.1, 1987) Q: Lita, a full time professor in San Ildefonso University, is paid on a regular monthly basis. She teaches for a period of 10 months in a school year, excluding the 2 month summer‐break. During the semestral break, the University did not pay her emergency Cost of Living allowance (ECOLA) although she received her regular salary since the semestral break was allegedly not an integral part of the school year and no teaching service were actually rendered by her. In short, the University invoked the principle of "no work, no pay". She seeks your advice on whether or not she is entitled to receive her ECOLA during semestral breaks. How would you respond to the query? A: There is no longer any law making it the legal obligation of an employer to grant an Emergency Cost of Living Allowance (ECOLA). Effective 1981, the mandatory living allowances provided for in earlier Presidential Decrees were integrated into the basic pay of all covered employees. Thus, whether the ECOLA will be paid or not during the semestral break now depends on the provisions of the applicable wage order or contract which may be a CBA, that many grant said ECOLA. (1997 Bar Question) Q: What is the concept of double HP? A: 2 RH on same day.

Present LOA w/pay

MAUNDY THURSDAY & ARAW NG KAGITINGAN unworked unworked

LOA w/ pay

worked

WED

42

Authorized absence

worked

Same

Worked and day is Rest Day

300% (at least) 390% (+30% of each 3 100%)

Q: Is double HP applicable at present? A: No, because Araw ng Kagitingan is moved to Monday nearest April 9. (R.A. 9242) Q: What is the concept of successive RH? A: WED Worked LOA w/pay LOA w/o pay LOA w/o pay

MAUNDY THURS RH

GOOD FRIDAY RH

ENTITLED TO HP Yes. Both

RH

RH

Yes. Both

RH

RH

No. Both

Worked

RH

Yes. Only to HP on Friday

Q: What are the conditions so that an Ee may be entitled to 2 successive HP? st A: On the day immediately preceding the 1 RH, he must be: 1. Present (worked), or 2. On LOA with pay. (Sec. 10, Rule IV, Book III, IRR) Q: What if the conditions are not met? A: He must work on the 1st RH to be entitled to HP on the 2nd RH. (Sec. 10, Rule IV, Book III, IRR) 5.LEAVES a.Service Incentive Leave Pay Q: What is service incentive leave (SIL)? A: It is 5 days leave with pay for every employee who has rendered at least 1 yr of service. It is commutable to its money equivalent if not used or exhausted at the end of year. Q: What do you mean by at least 1 year of service?

RATE 200% 200% 300% (at least)

A: Service for not less than 12 months, whether continuous or broken reckoned from the date the employee started working, including authorized absences and paid regular holidays unless the working days in the establishment as a matter of


LABOR STANDARDS practice or policy, or that provided in the employment contract is less than 12 months, in which case said period shall be considered as one year. (Sec. 3, Rule V, Book III, IRR)

the SIL may be on a pro‐rata basis. (No. VI(c), DOLE Handbook on Worker’s Statutory Monetary Benefit) Q: Are part‐time workers entitled to the full benefit of the yearly 5 day SIL?

Q: Who are entitled to SIL? A: GR: Applies to every Ee who has rendered at least 1 year of service. (Art. 95[a]) XPNS: 1. Government Ees and any of its political subdivisions including GOCCs 2. Those already enjoying the benefit 3. Domestic helpers and persons in the personal services of another 4. Those already enjoying vacation leave with pay of at least 5 days 5. Managerial Ees 6. Field personnel and other Ees whose performance is unsupervised by the Er 7. Employed in establishments regularly employing less than 10 workers 8. Exempt establishments 9. Engaged on task or contract basis, purely commission basis, or those who are paid in a fixed amount of performing work irrespective of the time consumed in the performance thereof. (Art. 95[b]) Q: Are teachers of private schools on contract basis entitled to SIL? A: Yes. The phrase "those who are engaged on task or contract basis" should, however, be related with "field personnel" applying the rule on ejusdem generis that general and unlimited terms are restrained and limited by the particular terms that they follow. Clearly, Cebu Institute of Technology teaching personnel cannot be deemed as field personnel which refers "to non‐agricultural Ees who regularly perform their duties away from the principal place of business or branch office of the Er and whose actual hours of work in the field cannot be determined with reasonable certainty. (Par. 3, Art. 82, LC). (CIT vs. Ople, G.R. No. 70203, Dec. 18, 1987) Q: Is SIL commutable to its monetary equivalent if not used or exhausted at the end of the year? A: Yes. It is aimed primarily at encouraging workers to work continuously and with dedication to the company. Q: What is the basis for cash conversion? A: The basis shall be the salary rate at the date of commutation. The availment and commutation of

A: Yes. Art. 95 of Labor Code speaks of the number of months in a year for entitlement to said benefit. (Bureau of Working Conditions Advisory Opinion to Phil. Integrated Exporter’s, Inc.) Q: Are piece‐rate workers entitled to the full benefit of the yearly 5 day SIL? A: It depends. 1.

Yes. Provided: a. They are working inside the premises of the employer (Er) and b. Under the direct supervision of the Er. 2. No. Provided: a. They are working outside the premises of the Er b. Hours spent in the performance of work cannot be ascertained with reasonable certainty c. The are not under the direct supervision of the Er Q: Does it apply to Ees with salaries above minimum wage? A: No. The difference between the minimum wage and the actual salary received by the Ees cannot be deemed as their 13th month pay and SIL pay as such difference is not equivalent to or of the same import as the said benefits contemplated by law. (JPL Marketing Promotions v. CA, G.R. No. 151966, July 8, 2005.) Q: Explain the entitlement of terminated Ees to SIL. A: 1.

2.

Illegally dismissed Ees ‐ entitled to SIL until actual reinstatement. (Integrated Contractor and Plumbing Works, Inc. v. NLRC, G.R.No. Aug.9, 2005) Legally dismissed Ees – the Ee who had not been paid of SIL from outset of employment is entitled only of such pay after a year from commencement of service until termination of employment or contract. (JPL Marketing Promotions v. CA, G.R. No. 151966, July 8, 2005)

43


UST GOLDEN NOTES 2011 said Ee would otherwise have been entitled to, and the SSS shall in turn pay such amount to the Ee concerned.

b.Maternity Leave Q: What is maternity leave benefit? A: A covered female employee (Ee) is entitled to a daily maternity benefit equivalent to 100% of her present basic salary, allowances and other benefits or the cash equivalent of such benefits for 60 days or 78 days in case of caesarian delivery. Q: What are the requirements in order that maternity benefits may be claimed? A: 1. 2.

There is childbirth, abortion or miscarriage She has paid at least 3 monthly contributions

Q: What are the conditions? A: 1.

2.

3.

The Ee shall have notified her employer (Er) of her pregnancy and the probable date of her childbirth which notice shall be transmitted to the SSS The payment shall be advanced by the Er in 2 equal installments within 30 days from the filing of the maternity leave application In case of caesarian delivery, the Ee shall be paid the daily maternity benefit for 78 days

4.

5.

6.

7.

44

Payment of daily maternity benefits shall be a bar to the recovery of sickness benefits for the same compensable period of 60 days for the same childbirth, abortion, or miscarriage The maternity benefits provided under Section 14‐A shall be paid only for the first four deliveries The SSS shall immediately reimburse the Er of 100% of the amount of maternity benefits advanced to the Ee by the Er upon receipt of satisfactory proof of such payment and legality thereof; and If an Ee should give birth or suffer abortion or miscarriage without the required contributions having been remitted for her by her Er to the SSS, or without the latter having been previously notified by the Er of the time of the pregnancy, the Er shall pay to the SSS damages equivalent to the benefits which

c.Paternity Leave Q: What is the concept of paternity leave benefits? A: Notwithstanding any law, rules and regulations to the contrary, every married male employee in the private and public sectors shall be entitled to a paternity leave of 7 days with full pay for the first 4 deliveries of the legitimate spouse with whom he is cohabiting. Q: What is paternity leave? A: It refers to the benefits granted to a married male employee allowing him not to report for work for 7 days but continues to earn the compensation therefore, on the condition that his spouse has delivered a child or suffered a miscarriage for purposes of enabling him to effectively lend support to his wife in her period of recovery and/or in the nursing of the newly‐born child. Q: What are the requirements in order to avail paternity leave? A: The male employee (Ee) applying for paternity leave shall: 1.

Notify his employer (Er) of the pregnancy of his legitimate spouse and The expected date of such delivery.

2. Q: What are the conditions for entitlement to paternity leave? A: The male Ee is; 1. Legally married to, and is cohabiting with the woman who delivers the baby 2. Ee of private or public sector; 3. Only for the first 4 deliveries of legitimate spouse with whom he is cohabiting; and 4. Notify his Er of the pregnancy of his legitimate spouse and the expected date of such delivery Note: For purposes of this Act, delivery shall include childbirth or any miscarriage.

Q: Jemuel is a bank employee of BPI. He is cohabiting with Paula for straight five years with whom he has four children. On the fifth year of their cohabitation, Paula had her miscarriage. Jemuel is availing himself of his paternity leave. Is he entitled to paternity leave?


LABOR STANDARDS A: No. Jemuel is not entitled to paternity leave because the facts of the case only show that he is only cohabiting with Paula. The law expressly provides that the male must be legally married to the woman with whom he is cohabiting as a condition for entitlement of paternity leave. Even assuming that Jemuel is legally married to Paula, he cannot avail also of the paternity leave because the law limits the deliveries only to four which include childbirth or miscarriage. Based on the facts, it is already the fifth delivery of the woman.

he/she is entrusted with the custody of the children; e. Nullity or annulment of marriage as decreed by a court or by a church as long as he/she is entrusted with the custody of the children; f. Abandonment of spouse for at least 1 yr; 3. Unmarried mother/father who has preferred to keep and rear his or her child/children instead of: a. having others care for them or b. give them up to a welfare institution; 4. Any other person who solely provides: a. parental care and b. support to a child or children; 5. Any family member who assumes the responsibility of head of family as a result of the: a. death, b. abandonment, c. disappearance or d. prolonged absence of the parents or solo parent.

d.Parental Leave Q: What is parental leave? A: Leave benefits granted to a solo parent to enable him/her to perform parental duties and responsibilities ‐ where physical presence is required. In addition to leave privileges under existing laws, parental leave of not more than 7 working days every year shall be granted to any solo parent Ee who has rendered service of at least 1 year. (Sec. 8) Q: What are the conditions for entitlement of parental leave? A: 1. He or she must fall among those referred to as solo parent 2. Must have the actual and physical custody of the child or children 3. Must have at least rendered service of one year to his or her employer 4. He or she must remain a solo parent Q: Who are those referred to as solo parent entitled to parental leave? A: Any individual who falls under any of the ff. categories: 1. A woman who gives birth as a result of rape and other crimes against chastity even without a final conviction of the offender, provided, That the mother keeps and raises the child; 2. Parent left solo or alone with the responsibility of parenthood due to: a. Death of spouse; b. Detention or service of sentence of spouse for a criminal conviction for at least 1 yr; c. Physical and/or mental incapacity of spouse d. Legal separation or de facto separation from spouse for at least 1 yr as long as

Note: A change in the status or circumstance of the parent claiming benefits under this Act, such that he/she is no longer left alone with the responsibility of parenthood, shall terminate his/her eligibility for these benefits. (Sec.3)

e.Leaves for victims of violence against women Q: What is the leave for victims of violence against women or otherwise known as battered woman leave? A: A female employee who is a victim of violence (physical, sexual, or psychological) is entitled to a paid leave of 10 days in addition to other paid leaves. (R.A. 9262, Anti‐ VAWC Act) 6.SERVICE CHARGES a.Coverage and Exclusion Q: What are service charges (SC)? A: These are charges collected by hotels, restaurants and similar establishments and shall be distributed at the rate of: COVERED Ees

MANAGEMENT

85%

15%

Equally distributed

1. 2.

To answer for losses and breakages and Distributed to Ees receiving

45


UST GOLDEN NOTES 2011 among them

Provided, that they have worked for at least 1 month, during a calendar year. (Revised th Guidelines on the Implementation of the 13 Month Pay Law) XPN: 1. Government Ees 2. Household helpers 3. Ees paid purely on commission basis 4. Ees already receiving 13th month pay

more than P2000 a month at the discretion of the management.

Q: Who are covered Ees? A: GR: All Ees are covered, regardless of their position, designation, employment status, irrespective of the method by which their wages are paid. Note: Applies only to hotels, restaurants and similar establishment collecting service charges.

XPN: Managerial Ees. (Sec. 2, Rule VI, Book III, IRR) b.Distribution Q: When is the share of employee distributed and paid to them? A: Not less than once every 2 weeks or twice a month at intervals not exceeding 16 days. c.Integration Q: What happens if the Service Charge is abolished? A: The share of the covered Ees shall be considered integrated in their wages on the basis of the average monthly share of each Ees for the past 12 months immediately preceding the abolition. Note: Service charges form part of the award in illegal dismissal cases.

7.13th MONTH PAY AND OTHER BONUSES a.Coverage, Exclusion/ exemptions from coverage Q: What is 13th month pay or its equivalent? A: Additional income based on wage required by P.D. 851 Requiring all Employers to pay their Employees a 13th month pay which is equivalent to 1/12 of the total basic salary earned by an employee (Ee) within a calendar year.

Q: What would be your advice to your client, a manufacturing company, who asks for your legal opinion on whether or not the 13th Month Pay Law covers a casual Ee who is paid a daily wage? A: I will advise the manufacturing company to pay the casual Ee 13th Month Pay if such casual Ee has worked for at least 1 month during a calendar year. The law on the 13th Month Pay provides that Ees are entitled to the benefit of said law regardless of their designation or employment status. The SC ruled in Jackson Building‐Condominium Corp. v. NLRC, G.R. No. 112546, March 13, 1996, interpreting P.D.851, as follows: Ees are entitled to the 13th month pay benefits regardless of their designation and irrespective of the method by which their wages are paid. (1998 Bar Question) Note: An Er, may give to his Ees ½ of the required 13th Month pay before the opening of the regular school yr. and the other half on or before the Dec. 24.

Q: Is 13th Month Pay legally demandable? A: Yes. It is a statutory obligation, granted to covered Ees, hence, demandable as a matter of right. (Sec 1, P.D. 851) b.Nature of 13th Month Pay Q: In what form is the 13th month pay paid or given? A: It is given in the form of: 1. 2. 3. 4.

Q: Who are covered by P.D. 851? A: GR: All rank‐and‐file Ees regardless of the amount of basic salary that they receive in a month, if their employers (Er) are not otherwise exempted from paying the 13th month pay. Such th Ees are entitled to the 13 month pay regardless of said designation of employment status, and irrespective of the method by which their wages are paid.

46

Christmas Bonus Midyear Bonus Profit Sharing Scheme Other Cash bonuses amounting to not less than 1/12 of its basic salary

Note: It must always be in the form of a legal tender.

Q: What are not proper substitutes for 13th Month pay? A: 1.

Free rice


LABOR STANDARDS 2. 3. 4.

Electricity Cash and stock dividends COLA (Sec. 3)

Q: Concepcion Textile Co. included the OT pay, night‐shift differential pay, and the like in the computation of its Ees’ 13th‐month pay. Subsequently, with the promulgation of the decision of the SC in the case of SMC vs. Inciong (103 SCRA 139) holding that these other monetary claims should not be included in the computation of the 13th month pay, Concepcion Textile Co. sought to recover under the principle of solutio indebiti the overpayment of the Ees’ 13th‐month pay, by debiting against future 13th‐month payments whatever excess amounts it had previously made.

2.

3.

4.

(1) Is the Company's action tenable? (2) With respect to the payment of the 13th‐ month pay after the SMC ruling, what arrangement, if any, must the Company make in order to exclude from the 13th‐month pay all earnings and remunerations other than the basic pay?

5.

A: The Company's action is not tenable. The principle of solutio indebiti which is a civil law concept is not applicable in labor law. (Davao Fruits Corp. vs. NLRC, et al., G.R. No. 85073 August 24, 1993). After the 1981 SMC ruling, the High Court decided the case of Philippine Duplicators Inc. vs. NLRC, GR 110068, Nov. 11, 1993. Accordingly, management may undertake to exclude sick leave, vacation leave, maternity leave, premium pay for regular holiday, night differential pay and cost of living allowance. Sales commissions, however, should be included based on the settled rule as earlier enunciated in Songco vs. NLRC, G.R. No. L‐ 50999, March 23, 1990. (1994 Bar Question)

6.

7.

Q: Are all Ers required to pay 13th Month Pay under P.D. 851? A: GR: Yes. It applies to all Ers, XPN: 1. Distressed Ers: a. Currently incurring substantial losses or b. In the case of non‐profit institutions and organizations, where their income, whether from donations, contributions, grants and other earnings from any source, has consistently declined by more than 40% of their normal income for the

last 2 years, subject to the provision of Sec. 7 of P.D. 851; The Government and any of its political subdivisions, including GOCCs, except those corporations operating essentially as private subsidiaries of the Government; Ers already paying their Ees 13‐month pay or more in a calendar year of its equivalent at the time of this issuance: Its equivalent shall include: a. Christmas bonus b. Mid‐year bonus c. Profit‐sharing payments and d. Other cash bonuses amounting to not less than 1/12th of the basic salary but It shall not include: a. cash and stock dividends, b. COLA c. all other allowances regularly enjoyed by the Ee, as well as non‐ monetary benefits. Ers of household helpers and persons in the personal service of another in relation to such workers; and Ers of those who are paid on purely commission, boundary, or task basis, and those who are paid a fixed amount for performing a specific work, irrespective of the time consumed in the performance thereof, except where the workers are paid on piece‐rate basis in which case the employer shall be covered by this issuance insofar as such workers are concerned.(Sec 3, P.D. 851)

Q: What are the options of covered Ers? A: 1.

2.

Pay one‐half of the 13th‐month pay required before the opening of the regular school year and the other half on or before the 24th day of December of every year. In any establishment where a union has been recognized or certified as the collective bargaining agent of the Ee, the periodicity or frequency of payment of the 13th month pay may be the subject of agreement.

47


UST GOLDEN NOTES 2011 Manggagawa sa Honda, G.R. No. 145561, June 15, 2005)

Q: How are claims adjudicated? A: Non‐payment of the 13th month pay provided by P.D. 851 and the rules of NLRC shall be treated as money claims cases. Q: Are the following Ees entitled to 13th month pay? a. b. c. d. A: 1.

Ees who are paid by results Ees with multiple Ers Private school teachers Resigned or separated Ees

Ee paid by results – entitled to 13th month pay. Note: Ees paid a fixed or guaranteed wage plus commission are also entitled to the mandated 13th month pay, based on their total earnings during the calendar year, i.e. on both their fixed or guaranteed wage and commission

2.

3.

4.

Those with Multiple Ers – Government Ees working part time in a private enterprise, including private educational institutions, as well as Ees working in 2 or more private firms, whether full or part time th basis, are entitled to the required 13 month pay from all their private Ers regardless of their total earnings from each or all their Ers. Private School Teachers, including faculty members of universities and colleges – entitled regardless of the number of months they teach or are paid within a year, if they have rendered service for at least 1 month within a year. Resigned or Separated Ees ‐ If resigned or separated from work before the time of th payment of 13 month pay, entitled to monetary benefit in proportion to the length of time he started working during the calendar year up to the time of resignation or termination of service. th (Pro‐rated 13 month pay)

th Q: When does pro‐ration of 13 Month Pay apply? A: GR: Pro‐ration of this benefit applies only in cases of resignation or separation from work; computation should be based on length of service and not on the actual wage earned by the worker (Honda Phils. v. Samahan ng

48

XPN: Ees who are paid a guaranteed minimum wage or commissions earned are entitled to 13th month pay based on total earnings. (Philippine Agricultural Commercial and Industrial Workers Union v. NLRC, G.R. No. 107994, Aug. 14, 1995) th Q: Is 14 Month Pay legally demandable? th A: No. The granting of 14 month pay is a management prerogative and is not legally demandable. It is basically a bonus and is gratuitous in nature. (Kamaya Point Hotel v. NLRC, G.R. No. 75289, Aug. 31, 1989) c.Commissions vis‐à‐vis 13th month pay Q: What is commission in relation to 13th month pay? A: 1.

2.

The salesman’s commissions, comprising a pre‐determined percent of the selling price of the goods sold by each salesman, were properly included in the term basic salary for purposes of computing their 13th month pay. The so called commission paid to or received by medical representatives of BoieTakeda Chemicals or by the rank and file Ees of Phil. Fuji Xerox were excluded from the term basic salary because these were paid as productivity bonuses. Such bonuses closely resemble profit sharing, payments and have no clear, direct, necessary relation to the amount of work actually done by each individual employee. d.CBA vis‐à‐vis 13th month pay

Q: What is CBA in relation to 13th month pay? A: The absence of an express provision in the CBA obligating the employer to pay the members of a union thirteenth month pay is immaterial. Notwithstanding therefore the absence of any contractual agreement, the payment of a thirteenth month pay being a statutory grant, compliance with the same is mandatory and is deemed incorporate in the CBA. 8.WOMEN WORKERS a.Discrimination (Art. 135. LC); Prohibited Acts (Art. 137. LC)


LABOR STANDARDS Q: What are the unlawful acts against women Ee? A: 1.

2.

Discrimination with respect to the terms and conditions of employment solely on account of sex a. Payment of lesser compensation to a female Ee as against a male Ee for work of equal value b. Favoring a male Ee with respect to promotion, training opportunities, study and scholarship grants on account of gender. (Art. 135) c. Favoring a male applicant with respect to hiring where the particular job can equally be handled by a woman d. Favoring a male Ee over a female Ee with respect to dismissal of personnel. Stipulating, whether as a condition for employment or continuation of employment: a. That a woman Ee shall not get married, or b. That upon marriage, such woman Ee shall be deemed resigned or separated. (Art. 136) Note: A woman worker may not be dismissed on the ground of dishonesty for having written ‘’single” on the space for civil status on the application sheet, contrary to the fact that she was married. (PT&T Co. v. NLRC, G.R. No. 118978, May 23, 1997)

3.

4. 5.

6.

7.

Dismissing, discriminating or otherwise prejudice a woman Ee by reason of her being married. (Art. 136) Denying any woman Ee benefits provided by law. (Art. 137) Discharge any woman for the purpose of preventing her from enjoying any of the benefits provided by law. (Art. 137) Discharging such woman on account of her pregnancy, or while on leave or in confinement due to her pregnancy. (Art. 137) Discharging or refusing the admission of such woman upon returning to her work for fear that she may again be pregnant. (Art. 137)

Note: Discrimination in any form from pre‐ employment to post employment, including hiring, promotion or assignment, based on the actual, perceived or suspected HIV status of an individual is unlawful. (Philippine AIDS Prevention and Control Act of 1998, [R.A. 8504])

Under Sec. 2 of R.A. 9710 or the Magna Carta of Women, the State condemns discrimination against women in all its forms and pursues by all appropriate means and without delay the policy of eliminating discrimination against women in keeping with the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW) and other international instruments consistent with Philippine law. The State shall accord women the rights, protection, and opportunities available to every member of society. The State shall take steps to review and, when necessary, amend and/or repeal existing laws that are discriminatory to women within three (3) years from the effectivity of this Act. (Sec. 12, R.A. 9710)

Q: Can an individual, the sole proprietor of a business enterprise, be said to have violated the Anti‐Sexual Harassment Act of 1995 if he clearly discriminates against women in the adoption of policy standards for employment and promotions in the enterprise? Explain. A: When an employer (Er) discriminates against women in the adoption of policy standards for employment and promotion in his enterprise, he is not guilty of sexual harassment. Instead, the Er is guilty of discrimination against women Ees which is declared to be unlawful by the LC. For an Er to commit sexual harassment, he – as a person of authority, influence or moral ascendancy – should have demanded, requested or otherwise required a sexual favor from his Ee whether the demand, request or requirement for submission is accepted by the object of said act. (2003 Bar Question) Q: At any given time, approximately 90% of the production workforce of a semiconductor company are females. 75% of the female workers are married and of child‐bearing years. It is imperative that the Company must operate with a minimum number of absences to meet strict delivery schedules. In view of the very high number of lost working hours due to absences for family reasons and maternity leaves, the company adopted a policy that it will employ married women as production workers only if they are at least 35 yrs of age. Is the policy violative of any law? A: Yes, it is violative of Art. 140 of the LC which provides that no employer shall discriminate against any person in respect to terms and conditions of employment on account of his age. (1998 Bar Question) b.Stipulation Against Marriage (Art. 136, LC)

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UST GOLDEN NOTES 2011 Q: What is the no‐spouse employment policy? A: GR: 1. Policy banning spouses from working in the same company. 2. May not facially violate Art. 136 of the LC but it creates a disproportionate effect and the only way it could pass judicial scrutiny is by showing that it is reasonable despite the discriminatory albeit disproportionate effect. XPN: Bona fide occupational qualification rule (BFOQ) Q: What is the BFOQ rule? A: There must be a finding of any BFOQ to justify an Ers no spouse rule. There must be a compelling business necessity for which no alternative exist other than the discriminating practice.

Glaxo does not impose an absolute prohibition against relationships between its Ees and those of competitor companies. Its Ees are free to cultivate relationships with and marry persons of their own choosing. What the company merely seeks to avoid is a conflict of interest between the Ee and the company that may arise out of such relationships. Furthermore, the prohibition forms part of the employment contract and Tecson was aware of such restrictions when he entered into a relationship with Bettsy. (Duncan Asso. of Detailman‐PTGWO v. Glaxo Wellcome Phil. Inc., G.R. No. 162994, Sep.17, 2004) c.Classification of Certain Women Workers (Art. 138, LC) Q: Who are covered under this Title? A: Any women who is permitted or suffered to work:

To justify a BFOQ the employer must prove two factors: 1.

2.

That the employment qualification is reasonably related to the essential operation of the job involved; and That there is a factual basis for believing that all or substantially all persons meeting the qualification would be unable to properly perform the duties of the job. (Star Paper v. Simbol, G.R. No. 164774, April 12, 2006)

Q: What is the importance of the BFOQ Rule? A: 1. To ensure that the Ee can effectively perform his work 2. So that the no‐spouse rule will not impose any danger to business. Q: Tecson was employed by Glaxo as medical representative who has a policy against Ees having relationships against competitor’s Ees. Tecson married Bettsy, a Branch coordinator of Astra, Glaxo’s competitor. Tecson was transferred to another area. Tecson did not accept such transfer. Is the policy of Glaxo valid and reasonable so as to constitute the act of Tecson as willful disobedience? A: The prohibition against personal or marital relationships with Ees of competitors companies upon Glaxo’s Ees is reasonable under the circumstances because relationships of that nature might compromise the interest of the company.

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1. 2.

3. 4.

With or without compensation In any night club, cocktail lounge, massage clinic, bar or similar establishment Under the effective control or supervision of the Er for a substantial period of time Shall be considered as an Ee of such establishment for purposes of labor and social legislation.

d.Anti‐ Sexual Harrasment Act RA 7877 Q: What is the policy of the State in enacting the Anti‐Sexual Harassment law? A: The State shall: 1. Value the dignity of every individual 2. Enhance the development of it human resources 3. Guarantee full respect for human rights and 4. Uphold the dignity of workers, Ee, applicants for employment, students or those undergoing training, instruction or education. (Sec. 2) Q: Who may be held liable for sexual harassment? A: In a work, education or training‐related environment sexual harassment may be committed by an: 1. Ee 2. Manager 3. Supervisor


LABOR STANDARDS 4. 5. 6. 7.

Agent of the (Er) Teacher, instructor, professor Coach, trainer, or Any other person who, having authority, influence or moral ascendancy over another in a work or training or education environment: a. Demands b. Requests or c. Requires any sexual favor from the other, regardless of whether the demand, request or requirement for submission is accepted by the object of R.A. 7877. (Sec. 3)

Q: How is sexual harassment committed? A: Generally, a person liable demands, requests, or otherwise requires any sexual favor from the other, regardless of whether the demand, request or requirement for submission is accepted by the latter. Q: Under the Sexual Harassment Act, does the definition of sexual harassment require a categorical demand or request for sexual favor? A: No. It is true that the provision calls for a “demand, request or requirement of a sexual favor.” But it is not necessary that the demand, request or requirement of a sexual favor be articulated in a categorical manner. It may be discerned, with equal certitude, from the acts of the offender. Likewise, it is not essential that the demand, request or requirement be made as a condition for continued employment or for promotion to a higher position. It is enough that the respondent’s acts result in creating an intimidating, hostile or offensive environment for the employee. (Domingo v. Rayala, G.R. No. 155831, Feb. 18, 2008) Q: When is sexual harassment committed? A: Specifically: 1. In a work‐related or employment environment: a. The sexual favor is made as a condition in the hiring or in the employment, re‐employment or continued employment of said individual, or in granting said individual favorable compensation, terms, conditions, promotions, or privileges; or the refusal to grant the sexual favor results in limiting,

segregating or classifying the Ee which in a way would discriminate, deprive or diminish employment opportunities or otherwise adversely affect said Ee; b. The above acts would impair the Ees’ rights or privileges under existing labor laws; or c. The above acts would result in an intimidating, hostile, or offensive environment for the Ee. 2. In an education or training environment: a. Against one who is under the care, custody or supervision of the offender; b. Against one whose education, training, apprenticeship or tutorship is entrusted to the offender; c. Sexual favor is made a condition to the giving of a passing grade, or the granting of honors and scholarships, or the payment of a stipend, allowance or other benefits, privileges, or considerations; or d. Sexual advances result in an intimidating, hostile or offensive environment for the student, trainee or apprentice. Q: What are the duties of the Er or head of office in a work‐related, education or training environment? A: 1. 2.

Prevent or deter the commission of acts of sexual harassment and Provide the procedures for the resolution, settlement or prosecution of acts of sexual harassment.

Towards this end, the Er or head of office shall: 1. Promulgate appropriate rules and regulations in consultation with the jointly approved by the Ees or students or trainees, through their duly designated representatives, prescribing the procedure for the investigation or sexual harassment cases and the administrative sanctions therefore. (Sec. 4) Note: Administrative sanctions shall not be a bar to prosecution in the proper courts for unlawful acts of sexual harassment. The said rules and regulations issued shall include, among others, guidelines on proper decorum in the workplace and educational or training institutions.

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2.

3.

Create a committee on decorum and investigation of cases on sexual harassment. The Er or head of office, education or training institution shall disseminate or post a copy of this R.A. 7877 for the information of all concerned

Q: What is the liability of the Er, head of office, educational or training institution? A: Ee shall be solidarily liable for damages arising from the acts of sexual harassment committed in the employment, education or training environment provided: 1. The Er or head of office, educational or training institution is informed of such acts by the offended party; and 2. No immediate action is taken thereon. (Sec. 5) Q: Can an independent action for damages be filed? A: Yes. Nothing under R.A. 7877 shall preclude the victim of work, education or training‐related sexual harassment from instituting a separate and independent action for damages and other affirmative relief. (Sec. 6) Q: What is the three‐fold liability rule in sexual harassment cases? A: An act of sexual harassment may give rise to civil, criminal and administrative liability on the part of the offender, each proceeding independently of the others. Q: When does the action prescribe? A: Any action shall prescribe in 3 years. Q: A Personnel Manager, while interviewing an attractive female applicant for employment, stared directly at her for prolonged periods, albeit in a friendly manner. After the interview, the manager accompanied the applicant to the door, shook her hand and patted her on the shoulder. He also asked the applicant if he could invite her for dinner and dancing at some future time. Did the Personnel Manager, by the above acts, commit sexual harassment? Reason. A: Yes, because the Personnel Manager, is in a position to grant or not to grant a favor (a job) to the applicant. Under the circumstances, inviting the applicant for dinner or dancing creates a situation

52

hostile or unfriendly to the applicant's chances for a job if she turns down the invitation. [Sec. 3(a)(3), R.A. No. 7877, Anti‐Sexual Harassment Act]. (2000 Bar Question) Q: In the course of an interview, another female applicant inquired from the same Personnel Manager if she had the physical attributes required for the position she applied for. The Personnel Manager replied: "You will be more attractive if you will wear micro‐mini dresses without the undergarments that ladies normally wear." Did the Personnel Manager, by the above reply, commit an act of sexual harassment? Reason. A: Yes. The remarks would result in an offensive or hostile environment for the Ee. Moreover, the remarks did not give due regard to the applicant’s feelings and it is a chauvinistic disdain of her honor, justifying the finding of sexual harassment (Villarama v. NLRC, G.R. No. 106341, Sep. 2, 1994) Q: Pedrito Masculado, a college graduate from the province, tried his luck in the city and landed a job as utility/maintenance man at the warehouse of a big shopping mall. After working as a casual Ee for 6 months, he signed a contract for probationary employment for 6 months. Being well‐built and physically attractive, his supervisor, Mr. Hercules Barak, took special interest to befriend him. When his probationary period was about to expire, he was surprised when one afternoon after working hours, Mr. Barak followed him to the men’s comfort room. After seeing that no one else was around, Mr. Barak placed his arm over Pedrito’s shoulder and softly said: “You have great potential to become a regular Ee and I think I can give you a favorable recommendation. Can you come over to my condo unit on Saturday evening so we can have a little drink? I’m alone, and I’m sure you want to stay longer with the company.” Is Mr. Barak liable for sexual harassment committed in a work‐related or employment environment? A: Yes, the elements of sexual harassment are all present. The act of Mr. Barak was committed in a workplace. Mr. Barak, as supervisor of Pedrito Masculado, has authority, influence and moral ascendancy over Masculado. Given the specific circumstances mentioned in the question like Mr. Barak following Masculado to the comfort room, etc. Mr. Barak was requesting a sexual favor from Masculado for a favorable recommendation regarding the latter's employment. It is not impossible for a male, who is a homosexual, to ask for a sexual favor from another male. (2000 Bar Question)


LABOR STANDARDS 9.MINOR WORKERS a.Regulation of working hours of a child, Employment of the child in public entertainment, Prohibition of employing minors in certain undertakings and in certain advertisements Q: What are the general prohibitions? A: GR: 1.

2.

No person under 18 years of age will be allowed to be employed in an undertaking which is hazardous or deleterious in nature. No Er shall discriminate against any person in respect to terms and conditions of employment on account of his age.

XPN: A. Below 15 yrs. Old 1. The child works directly under the sole responsibility of his parents, or guardians who employ members of his family, subject to the following conditions: a. Employment does not endanger the child’s safety, health and morals b. Employment does not impair the child’s normal dev’t c. Er‐parent or legal guardian provides the child with the primary and/or secondary education prescribed by the Dept. of Education 2. The child’s employment or participation in public entertainment or information through cinema, theater, radio or television is essential provided: a. Employment contract is concluded by the child’s parents or legal guardian, b. With the express agreement of the child concerned, if possible, and c. The approval of DOLE, the following must be complied with: i. The employment does not involve advertisement or commercials promoting alcoholic beverages, intoxicating drinks, tobacco and its by‐products or exhibiting violence ii. there is a written contract approved by DOLE

the conditions provided in the first instance are met. Above 15 but below 18 – may be employed in any non‐hazardous work Above 18 – no prohibition iii.

B.

C. Q: What is the duty of the Er before engaging child into work?

A: The Er shall first secure a work permit from the DOLE which shall ensure observance of the requirements. (Sec. 12, R.A. 7160) Q: What is the rule regarding the issuance of work certificates/ permits for children at least 15 but below 18 years of age? A: The issuance of a DOLE Certificate to youth aged 15 to below 18 years of age is not required by law. No employer shall deny opportunity to any such youth applying for employment merely on the basis of lack of work permit or certificate of eligibility for employment. Any young person aged 15 to below 18 years of age may present copy of this DOLE advisory to any employer, job provider, government authority, or his/her representative when seeking employment or anytime during employment. (DOLE Department Advisory No. 01‐08) Q: What is a non‐hazardous work? A: It is any work or activity in which the Ee is not exposed to any risk which constitutes an imminent danger to his safety and health. Q: What are hazardous workplaces? A: 1. Nature of work exposes the workers to dangerous environmental elements, contaminants or work conditions 2. Workers are engaged in construction work, logging, fire‐fighting, mining, quarrying, blasting, stevedoring, dock work, deep‐sea fishing, and mechanized farming 3. Workers are engaged in the manufacture or handling of explosives and other pyrotechnic products 4. Workers use or are exposed to heavy or power‐driven tools Q: You were asked by a paint manufacturing company regarding the possible employment as a mixer of a person, aged 17, who shall be directly under the care of the section supervisor. What advice would you give? Explain briefly. A: I will advise the paint manufacturing company that it cannot hire a person who is aged 17. Art 139

53


UST GOLDEN NOTES 2011 (c) of the LC provides that a person below 18 yrs of age shall not be allowed to work in an undertaking which is hazardous or deleterious in nature as determined by the SLE. Paint manufacturing has been classified by the SLE as a hazardous work. (2002 Bar Question) Q: What are the prohibitions on the employment of children in certain advertisements? A: No employment of child models in all commercial advertisements promoting: 1. 2. 3. 4.

Violence Alcoholic beverages Intoxicating drinks Tobacco and its by products

Q: A spinster school teacher took pity on one of her pupils, a robust and precocious 12‐year old boy whose poor family could barely afford the cost of his schooling. She lives alone at her house near the school after her housemaid left. In the afternoon, she lets the boy do various chores as cleaning, fetching water and all kinds of errands after school hours. She gives him rice and P30.00 before the boy goes home at 7:00 every night. The school principal learned about it and charged her with violating the law which prohibits the employment of children below 15 years of age. In her defense, the teacher stated that the work performed by her pupil is not hazardous, and she invoked the exception provided in the Department Order of DOLE for the engagement of persons in domestic and household service. Is her defense tenable? Reason? A: No, her defense is not tenable. Under Art. 139 of the LC on “minimum employable age”, no child below 15 years of age shall be employed except when he works directly under the sole responsibility of his parents or guardian, the provisions of the alleged DO of DOLE to the contrary notwithstanding. A mere DO cannot prevail over the express prohibitory provisions of the LC. (2004 Bar Question) Q: Determine whether the following minors should be prohibited from being hired and from performing their respective duties indicated hereunder: 1. A 17‐year old boy working as miner at the Walwadi Mining Corporation. A: Yes, he should be prohibited from being hired and from performing the duties of a miner because such constitutes hazardous work under D.O. No. 04 Series of 1999. Art. 139 (c) of LC expressly prohibits

54

the employment of persons below 18 years of age in an undertaking which is hazardous or deleterious in nature as determined by the SLE. 2. An 11‐year old boy who is an accomplished singer and performer in different parts of the country. A: No, he should not be prohibited from being hired and from performing as a singer. Under Art. VIII Sec. 12 par. 2 of R.A. 7619 as amended by R.A. 7658, this constitutes an exception to the general prohibition against the employment of children below 15 years of age, provided that the following requirements are strictly complied with: 1. The Er shall ensure the protection, health safety and morals of the child 2. The Er shall institute measures to prevent the child’s exploitation or discrimination taking into account the system and level of remuneration, and the duration and arrangement of working time; and 3. The Er shall formulate and implement, subject to the approval and supervision of competent authorities, a continuing program for training and skill acquisition of the child. Moreover, the child must be directly under the sole responsibility of his parents or guardian and his employment should not in any way interfere with his schooling. 3. A 15‐year old girl working as a library assistant in a girls' high school. A: No, she should not be prohibited from working as a library assistant because the prohibition in the LC against employment of persons below 18 years of age merely pertains to employment in an undertaking which is hazardous or deleterious in nature as identified in the guidelines issued by the SLE working as a library assistant is not one of undertakings identified to be hazardous under D.O. No 04 Series of 1999. 4. A 16‐year old girl working as model promoting alcoholic beverages. A: Yes, she should be prohibited from working as a model promoting alcoholic beverages. R.A. 7610 categorically prohibits the employment of child models in all commercials or advertisements promoting alcoholic beverages and intoxicating drinks, among other things. 5. A 17‐year old boy working as a dealer in a casino.


LABOR STANDARDS A: Yes, he should be prohibited from working as a dealer in casino, because Art. 140 of the LC prohibits the employment of persons below 18 years of age in an undertaking which is hazardous or deleterious in nature identified in the guidelines issued by the SLE. Working as a dealer in a casino is classified as hazardous under D.O. No. 04 Series of 1999 as it exposes children to physical, psychological or sexual abuses. (2006 Bar Question) b.Act Against Child Labor (RA 9231) and Child Abuse Law (RA 7610) Q: What is child labor? A: Any work or economic activity performed by a child that subjects him or her to any form of exploitation or is harmful to his or her health and safety or physical, mental or psychosocial development. Q: Who is a working child? A: Any child engaged as follows: 1. When the child is below 18 years of age in a work or economic activity that is not child labor; or 2. When the child is below 15 years of age: a. In work where he/she is directly under the responsibility of his/her parents or legal guardian and where only members of the child’s family are employed; or b. In public entertainment or information Q: When may the State intervene in behalf of the child? A: 1. The parent, guardian, teacher or person having care or custody of the child fails or is unable to protect the child against abuse, exploitation and discrimination; or 2. When such acts are committed against the child by the said parent, guardian, teacher or person having care and custody over the child Q: What is the limitation on the hours of work of a working child? A: If the child is: 1. Below 15 years of age – not more than 20 hours a week and not more than 4 hours a day

Not allowed to work between 8:00 pm – 6:00 am At least 15 years of age but below 18 years of age – will not exceed 8 hours a day or 40 hours a week Not allowed to work between 10:00 pm – 6:00 am -

2.

Q: What are the worst forms of labor? A: 1.

2.

3.

4.

5.

All forms of slavery (Anti‐Trafficking of Persons Act of 2003) or practices similar to slavery such as sale and trafficking of children, debt bondage and serfdom and forced or compulsory labor, including recruitment of children for use in armed conflict; The use, procuring, offering or exposing of a child pornography or for pornographic performances; The use, procuring, offering or exposing of a child for illegal or illicit activities, including the production and trafficking of dangerous drugs and volatile substances prohibited under existing laws; Employing child models in all commercials or advertisements promoting alcoholic beverages, intoxicating drinks, tobacco and its byproducts and violence; and Work which, by its nature or circumstances in which it is carried out, is hazardous or likely to be harmful to the health, safety or morals of children.

Q: Who can file a complaint for unlawful acts committed against children? A: 1. Offended party 2. Parents or guardians 3. Ascendants or collateral relatives within rd the 3 degree of consanguinity 4. Officer, social worker or representative of a licensed child‐caring institution 5. Officer or social worker of DSWD 6. Barangay chairman of the place where the violation occurred, where the child is residing or employed 7. At least 3 concerned, responsible citizens where the violation occurred Q: Which courts have jurisdiction over offenses punishable under R.A. 9231? A: The Family Courts shall have original jurisdiction over all cases involving offenses punishable under this Act

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5.

10.EMPLOYMENT OF HOUSEHELPERS a.Definition Q: What is domestic or household service? A: 1. Services in the Ers home 2. Usually necessary or desirable 3. For the maintenance and employment thereof 4. Includes ministering to the personal comfort and convenience of the members of the Ers household 5. Including services of family drivers. Q: Who is a househelper? A: A househelper is synonymous to domestic servant 1. Any person, male or female; 2. Who renders services in and about the Ers home and; 3. Services are usually necessary or Desirable for the maintenance and enjoyment thereof, and 4. Ministers exclusively to the personal comfort and enjoyment of Ers family Note: The children and relatives of a househelper who live under the Ers roof and who share the accommodations provided for the househelper by the Er shall not be deemed as househelper’s if they are not otherwise engaged as such and are not required to perform any substantial household work. (Sec 3, Rule XII, Book III, IRR) The definition of a househelper cannot be interpreted to include househelp or laundry women working in staffhouses of a company. (APEX Mining CO., Inc., v. NLRC, G.R. No. 94951, April 22, 1991)

b.Benefits accorded househelpers Q: What are the rights of househelpers? A: 1.

2.

3.

4.

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Original contract of domestic service shall not last for more than 2 years but it may be renewed by the parties. (Art. 142) Entitled to minimum wage in addition to lodging, food, and medical attendance. (Art. 144) Employment contract should be reviewed every 3 years with the end view of improving the terms and conditions of employment. (Art. 143) SSS benefits for those who are receiving at least P1,000 per month. (Art. 143)

Non‐assignment to a work in a commercial, industrial or agricultural enterprise at a wage or salary rate lower than that provided for agricultural or non‐ agricultural workers. (Art. 145) 6. Ees under 18 years of age shall be given opportunity for at least elementary education. The cost of education shall be part of the HH’s compensation, unless otherwise stipulated. (Art 146) 7. Should be treated in a just and humane manner. (Art. 147) 8. Not to be treated with physical violence (Art. 147) 9. Suitable and sanitary living headquarters as well as adequate food and medical attendance. (Art. 148) 10. Termination of employment should be a. upon expiration of term of employment, or b. based on just cause (Art. 149) 11. Indemnity for unjust termination of service 12. Employment certification as to nature and duration of service and efficiency and conduct of househelper.

Q: What is the minimum wage for househelpers? A: 1. Meto Manila‐P 800 / month 2. Other Chartered Cities or First Class Municipalities‐P 650 / month 3. In other Municipalities‐P 550 / month Note: The minimum cash wage rates shall be paid to the househelpers in addition to lodging, food and medical attendance.

Q: Is there an OT Pay for househelpers? A: No. The LC is silent on the grant of OT pay, HP, Premium Pay and SIL to those engaged in the domestic or household service. Moreover Art. 82 of LC expressly excludes domestic helpers from its coverage. (Ultra Villa Food Haus v. Geniston, G.R. No. 120473, June 23, 1999) Q: Erlinda worked as a cook, preparing the lunch and merienda of the Ees of Remington Industrial Sales Corp. She worked at the premises of the company. When Erlinda filed an illegal dismissal case, Mr. Tan, the managing director of Remington Corp. claimed that Erlinda was a domestic helper, and not a regular Ee of Remington Corp. Mr. Tan argued that it is only when the househelper or domestic servant is assigned to certain aspects of the business of the Er that such househelper or


LABOR STANDARDS d. Reliefs for Unjust Termination

domestic servant may be considered as such an employee. Is Erlinda a domestic or househelper? A: No, Erlinda is clearly not a househelper. A “househelper” or “domestic servant” under the Implementing Rules of the LC is one who is employed in the Er’s home to minister exclusively to the personal comfort and enjoyment of the Er’s family. A househelper, domestic servant or laundrywoman in a home or in a company staffhouse is different in the sense that in a corporation or a single proprietorship engaged in business or industry or any agricultural or similar pursuit, service is being rendered in the staffhouses or within the premises of the business of the Er. In such instance, they are Ees of the company or Er in the business concerned, entitled to the privileges of a regular Ee. The mere fact that the househelper or domestic servant is working within the premises of the business of the employer and in relation to or in connection with its business, as in its staffhouses for its guest or even for its officers and Ees, warrants the conclusion that such househelper or domestic servant is and should be considered a regular Ee and not a househelper. (Remington Industrial v. Castaneda, G.R. Nos. 169295‐96, Nov.20, 2006) Q: NBC has a resthouse and recreational facility in the highlands of Tagaytay City for the use of its top executives and corporate clients. The resthouse staff includes a caretaker, two cooks and a laundrywoman. All of them are reported to the SSS as domestic or household Ees of the resthouse and recreational facility and not of NBC. Can NBC legally consider the caretaker, cooks and laundrywoman as domestic Ee’s of the resthouse and not of NBC? A: No, they are not domestic Ees. They are NBC’s Ees because the resthouse and recreational facility are business facilities as they are for use of the top executives and clients of NBC. (Traders Royal Bank v. NLRC, G.R. No. 127864, Dec. 22. 1999). (2000 Bar Question) c.Termination Q: What is the proper procedure in the termination of a househelper?

Q: What are the rules for indemnity? A: 1. If the period for household service is fixed, neither the Er nor the househelper may terminate the contract before the expiration of the term except for just cause. 2. If the househelper is unjustly dismissed, he or she shall be paid the compensation already earned plus that for the 15 days by way of indemnity. 3. If the househelper leaves without justifiable reason, he or she shall forfeit any unpaid salary due him or her not exceeding 15 days. Q: When can the HH demand for employment certification? A: Upon the severance of the household service relationship, the househelper may demand from the Er a written statement of the nature and duration of the service and his/ her efficiency and conduct as househelper. 11.EMPLOYMENT OF HOMEWORKERS a.Defintion Q: Who are homeworkers? A: They are those who perform in or about his own home any processing or fabrication of goods or materials, in whole or in part, which have been furnished directly or indirectly, by an Er and sold thereafter to the latter. Q: Who is the Er of Homeworker? A: Includes any person, natural or artificial who, for his account or benefit, or on behalf of any person residing outside the country, directly or indirectly, or through an Ee, agent contractor, subcontractor or any other person: 1.

A: The termination of the employment of a househelper should be: a. b.

Upon expiration of the term of employment, or Based on just cause (Art. 149)

2.

Delivers or causes to be delivered, any goods, articles or materials to be processed or fabricated in or about a home and thereafter to be returned or to be disposed of or distributed in accordance with his directions. Sells any goods, articles or materials to be processed or fabricated in or abut a home and then rebuys them after such processing or fabrication, either by himself or through some other person.

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b.Rights and benefits accorded homeworkers Q: What is the duty of the Er in case he contracts with another the performance of his work?

The deduction is made at such rate that the amount deducted does not exceed 20% of the HW’s earnings in a week.

Q: Distinguish househelpers from homeworkers.

A: It shall be the duty of the Er to provide in such contract that the Ees or HWs of the contractor and the latter’s subcontractor shall be paid in accordance with the LC. Q: What is the liabilty of the Er if the contractor or subcontractor fails to pay the wages or earnings of his Ees? A: Er shall be jointly and severally liable with the contractor or sub‐contractor to the workers of the latter to the extent that such work is performed under such contract, in the same manner as if the Ees or HWs were directly engaged by the Er. Q: Can Homeworkers form labor organizations? A: Yes. DO No. 5, replacing Rule XIV of the IRR Book 3 of the LC, authorizes the formation and registration of labor organization of industrial HWs. It also makes explicit the Ers duty to pay and remit SSS, Philhealth and ECC premiums. Q: What are the prohibitions against homework? A: No homework shall be performed on: 1. 2. 3.

Explosives, fireworks and similar articles; Drugs and poisons; and Other articles, the processing of which requires exposure to toxic substances. (Sec. 13, Rule XIV, Book III, IRR)

c.Conditions for deduction from homeworker’s earnings Q: Can the Er make deductions on homeworker’s earnings? A: GR: No Er, contractor or subcontractor shall make any deduction from the HWs earnings for the value of materials which have been lost, destroyed, soiled or otherwise damage. XPN: Unless the ff. conditions are met: 1. The HW is clearly shown to be responsible for the loss or damage 2. The Ee is given reasonable opportunity to show cause why deductions should not be made; 3. The amount of such deduction is fair and reasonable and shall not exceed the actual loss or damages; and

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A: HOUSEHELPERS

Minister to the personal needs and comfort of his Er in the latter’s home

HOMEWORKERS Performs in or about his own home any processing or fabrication of goods or materials, in whole or in part, which have been furnished directly or indirectly, by an Er and sold thereafter to the latter.

Q: Josie is the confidential secretary of the Chairman of the Board of the bank. She is presently on maternity leave. In an arrangement where the Chairman of the Board can still have access to her services, the bank allows her to work in her residence during her leave. For this purpose, the bank installed a fax machine in her residence, and gave her a cellphone and a beeper. Is Josie a homeworker under the law? Explain. A: No, she is actually an office worker. She is not an industrial homeworker who accepts work to be fabricated or processed at home for a contractor, which work, when finished, will be returned to or repurchased by said contractor. (Art. 155, LC) (2000 Bar Question) 12.APPRENTICES AND LEARNERS a.Apprentices Q: Who is an apprentice? A: Any worker who is covered by a written apprenticeship agreement with an individual employer or any of the entities recognized under the LC. Q: What is apprenticeship? A: It is practical training on the job supplemented by related theoretical instruction. Q: What is an apprenticeable occupation? A: That which requires more than 3 months of practical training with theoretical instruction Q: What is on the job training (OJT)? A: It is practical work experience through actual participation in productive activities given to or acquired by an apprentice.


LABOR STANDARDS Q: What are highly technical industries?

Q: What is the employment status of apprentices?

A: Those which are engaged in the application of advanced technology. Q: What are related theoretical instructions? A: Technical information based on apprenticeship standards approved by the Bureau.

A: They are contractual workers whose length of service depends on the term provided for in the apprenticeship agreement. Thus, the employer is not obliged to employ the apprentice after the completion of his training.

Note: Prior approval by TESDA (formerly DOLE) of the proposed apprenticeship program is a condition sine qua non. Otherwise, apprentice becomes a regular Ee. (Nitto Enterprises v. NLRC, G.R. No. 114337, Sep. 29, 1995).

A: Must not exceed 6 months:

Q: What are the qualifications of an apprentice?

Q: What is the period of apprenticeship?

1.

2.

A: 1.

At least 15 years of age Note: Those below 18 years of age shall not work in hazardous occupations

2. 3. 4.

5.

Physically fit for the occupation Possess vocational aptitude and capacity Possess: a. The ability to comprehend, and b. Follow oral and written instructions The company must have an apprenticeship program duly approved by the DOLE.

Note: Trade and industry associations may recommend to the SLE appropriate educational requirements for different occupations.

Q: When is an occupation deemed hazardous?

Q: What is the status of an apprentice hired after such term? A: He is deemed a regular Ee. He cannot be hired as a probationary Ee since the apprenticeship is deemed the probationary period. Q: What is the wage rate of an apprentice? A: Start at not less than 75% of the statutory minimum wage for the 1st 6 months (except OJT); thereafter, shall be paid in full minimum wage, including the full COLA. Note: GR: Apprenticeship programs shall be primarily voluntary

A: 1.

2.

3.

4.

Nature of work exposes worker to dangerous environmental elemental contaminants or work conditions Workers are engaged in construction work, logging, firefighting, mining, quarrying, blasting, stevedoring, deep‐sea fishing, and mechanized farming Workers are engaged in the manufacture or handling of explosives and other pyrotechnic products Workers use, or are exposed to heavy or power‐driven machinery or equipment.

Q: Who may employ apprentices? A: 1. Only employers in highly technical industries and 2. Only in apprenticeable occupations approved by SLE

2 months/400 hours: Trades or occupations which normally require 1 year or more for proficiency 1 month/200 hours: Occupations and jobs which require more than 3 months but less than 1 year for proficiency. (Sec. 19, Rule VI, Book II, IRR)

XPN: Compulsory apprenticeship: 1. National security or economic development so demand, the President may require compulsory training 2. Services of foreign technicians are utilized by private companies in apprenticeable trades.

Q: What are the rules regarding apprenticeship agreements? A: Apprenticeship agreements, including the wage rates of apprentices, shall: 1. 2. 3.

Conform to the rules issued by SLE. The period of apprenticeship shall not exceed 6 months. Apprenticeship agreements providing for wage rates below the legal minimum wage, which in no case shall start below 75% of the applicable min. wage, may be entered into only in accordance with

59



4.

apprenticeship programs duly approved by the SLE. The DOLE shall develop standard model programs of apprenticeship. (Sec. 18, Rule VI, Book II, IRR)

Q: Who signs the apprenticeship agreement? A: Every apprenticeship agreement shall be signed by: 1. 2.

The employer or his agent, or An authorized representative of any of the recognized organizations, associations or groups, and The apprentice.

3. Q: Who will sign if the apprentice is a minor? A: An apprenticeship agreement with a minor shall be signed in his behalf by: 1. 2.

His parent or guardian, or if the latter is not available, An authorized representative of the DOLE.

Q: May apprentices compensation? A: Required:

be

hired

without

1. 2. 3. 4.

By school By the training program curriculum For Graduation For board examinations Q: What are the rules on working scholars? A: There is no Er‐Ee relationship between students on one hand, and schools, where there is written agreement between them under which the former agree to work for the latter in exchange for the privilege to study free of charge. The student is not considered an Ee. (Sec. 14, Rule IX, Book III, IRR) Q: Padilla entered into a written agreement with Gomburza College to work for the latter in exchange for the privilege of studying in said institution. His work was confined to keeping clean the lavatory facilities of the school. One school day, he got into a fist fight with a classmate, Monteverde, as a result of which the latter sustained a fractured arm. Victor filed a civil case for damages against him, impleading Gomburza College due to the latter's alleged liability as his Er. Under the circumstances, could Gomburza College be held liable by Victor Monteverde as an Padilla’s Er?

60

A: Gomburza College is not liable for the acts of Padilla because there is no Er‐Ee relationship between them. As provided in the Rules and Regulations Implementing the LC "there is no Er‐Ee relationship between students on one hand, and schools, colleges, or universities on the other, where students work with the latter in exchange for the privilege to study free of charge, provided the students are given real opportunity, including such facilities as may be reasonable and necessary to finish their chosen courses under such arrangement." (1997 Bar Question) Q: Who may terminate an apprenticeship agreement? A: 1.

2.

Either party may terminate an agreement after the probationary period but only for a valid cause. It may be initiated by either party upon filing a complaint or upon DOLE’s own initiative.

Q: Who may appeal the decision of the authorized agency of the DOLE? A: It may be appealed by any aggrieved person to the SLE within 5 days from receipt of the decision. Note: The decision of the SLE shall be final and executory.

Q: What is Exhaustion of Administrative Remedies (EAR)? A: It is a condition precedent to the institution of action. (Sec. 32b, Rule VI, Book II, IRR) Q: How is the principle of Exhaustion of Administrative Remedies applied in case of breach of apprenticeship agreement? A: No person shall institute any action for the enforcement of any apprenticeship agreement or damages for breach of any such agreement, unless he has exhausted all available administrative remedies. Q: Who shall settle differences arising out of apprenticeship agreement? A: The plant apprenticeship committee shall have the initial responsibility for settling differences arising out of apprenticeship agreement. (Sec. 32b, Rule VI, Book II, IRR) Q: What is the procedure for the termination of apprenticeship?


LABOR STANDARDS A: The party terminating shall: 1. 2. 3.

Serve a written notice on the other at least 5 days before actual termination, Stating the reason for such decision; and A copy of said notice shall be furnished the Apprenticeship Division concerned.

b.Learners Q: Who are learners? A: 1. They are persons hired as trainees in semi‐skilled and other industrial occupations 2. Which are non‐apprenticeable and 3. Which may be learned through practical training on the job in a relatively short period of time 4. Which shall not exceed 3 months 5. Whether or not such practical training is supplemented by theoretical instructions. (Sec. 1a, Rule VII, Book II, IRR) Q: When may learners be employed? A: 1. 2. 3.

When no experienced worker is available It is necessary to prevent curtailment of employment opportunities; and Employment does not create unfair competition in terms of labor costs or impair or lower working standards.

A: Only employers in semi‐skilled and other industrial occupations which are non‐ apprenticeable. Q: What is the status of learners who have been allowed or suffered work during the first 2 months, if training is terminated by the Er before the end of the stipulated period through no fault of the learner? A: They are deemed regular employees. (Sec. 4, Rule VII, Book II, IRR) c.Distinctions between Learnership and Apprenticeship Q: Distinguish Learnership from Apprenticeship. A: Learnership Training on the job in semi‐ skilled and other industrial occupation or trades which are non‐apprenticeable and which may be learned thru practical training on the job in a relatively short period of time.

3.

4.

Min: 3 months Max: 6 months Commitment to employ With commitment to employ the learner as a No commitment to hire regular Ee if he desires upon completion of learnership In case of pretermination of contract Considered a regular Ee if pre‐termination occurs Worker not considered after 2 months of training as regular employee. and the dismissal is without fault of the learner. Coverage Highly technical Semi‐skilled/Indus‐trial industries and only in occupations industrial occupation There is a list of learnable No list trades by TESDA Written agreement Require Learnership Requires Apprenticeship Agreement Agreement Max: 3 months

The names and addresses of the learners; The duration of the learnership period, which shall not exceed 3 months; The wages or salary rates of the learners which shall begin at not less than 75% of the applicable minimum wage; and A commitment to employ the learners if they so desire, as regular employees upon completion of the learnership.

Q: What is the qualification of a learner? A: Must be at least 15 years of age. Note: Those below 18 years of age shall not work in hazardous occupations.

Q: Who may employ learners?

Training in trades which are apprenticeable, that is, practical training on the job supplemented by related theoretical instruction for more than 3 months.

Duration of training

Q: What is a learnership agreement? A: Any employer desiring to employ learners shall enter into a learnership agreement with them, which agreement shall include: 1. 2.

Apprenticeship Nature

61


UST GOLDEN NOTES 2011 13.HANDICAPPED WORKERS (RA 9277) 13. a.Definition

disability he can still efficiently perform his work, he cannot be classified as handicapped; he would be considered a qualified disabled worker entitled to the same treatment as qualified able‐bodied workers.

Q: Who are handicapped workers (HW)? A: Those whose earning capacity is impaired by: 1. 2. 3. 4. 5. 6.

Physical deficiency Age Injury Disease Mental deficiency Illness

Q: What is the duration of the employment period of handicapped workers? A: There is no minimum or maximum duration. It depends on the agreement but it is necessary that there is a specific duration stated.

b.Rights of disabled workers Q: What are the rights and privileges of disabled workers? A: 1. 2.

3. 4.

5.

Equal opportunity for employment Sheltered employment (the gov’t shall endeavour to provide them work if suitable employment for disabled persons cannot be found through open employment) Apprenticeship Vocational rehabilitation (means to develop the skills and potentials of disabled workers and enable them to compete in the labor market) Vocational guidance and counselling

Q: May handicapped workers be hired as apprentices or learners?

c.Prohibitions on discrimination against disabled persons

A: Yes, if their handicap is not such as to effectively impede the performance of job operations in the particular occupations for which they are hired. (Art. 81)

Q: What is the prohibition on discrimination against disabled workers?

Q: Can a handicapped workers acquire the status of a regular Ee? A: Yes, if work is usually or necessarily or desirable to the business. (Bernardo v. NLRC, G.R No. 122917, July 12, 1999)

A: No disable person shall be denied access to opportunities for suitable employment. A qualified disabled employee shall be subject to the same terms and conditions of employment and the same compensation, privileges, benefits, fringe benefits, incentives or allowances as a qualified able bodied person.

A: Employers in all industries. Provided, the handicap is not such as to effectively impede the performance of job operations in the particular occupations for which they are hired

Five percent (5%) of all casual emergency and contractual positions in the Departments of Social Welfare and Development; Health; Education, Culture and Sports; and other government agencies, offices or corporations engaged in social development shall be reserved for disabled persons.

Q: When can handicapped workers be employed?

d.Incentives for employers

Q: Who may employ handicapped workers?

A: 1.

2.

When their employment is necessary to prevent curtailment of employment opportunities and When it will not create unfair competition in labor costs or lower working standards. (Art. 79)

Q: Does the mere fact that a worker has a disability, make him a handicapped worker? A: No, because his disability may not impair his efficiency or the quality of his work. If despite his

62

Q: What are the incentives provided for employers in employing disabled workers? A: 1. Entitled to an additional deduction, from their gross income, equivalent to twenty‐five percent (25%) of the total amount paid as salaries and wages to disabled persons: Provided, however, That such entities present proof as certified by the Department of Labor and Employment that disabled persons are under their employ: Provided, further, That the disabled employee is accredited with the Department of Labor and Employment and


LABOR STANDARDS the Department of Health as to his disability, skills and qualifications 2. Private entities that improve or modify their physical facilities in order to provide reasonable accommodation for disabled persons shall also be entitled to an additional deduction from their net taxable income, equivalent to fifty percent (50%) of the direct costs of the improvements or modifications Q: Distinguish handicapped from disabled? A:

Handicapped

Disabled (Differently Abled)

Earning capacity is impaired by age, or physical or mental deficiency or injury.

Refers to all suffering from restriction of different abilities as a result of mental, physical or sensory impairment to perform an activity in the manner or within range considered normal for a human being.

Covers only workers.

Covers all activities or endeavors.

Basis: loss/impairment of earning capacity.

Basis: range of activity which is normal for a human being.

Loss due to injury or physical or mental defect or age.

Restriction due to impairment of mental/physical/ sensory defect .

If hired, entitled to 75% of minimum wage. Subject to definite periods of employment.

If qualified, entitled to all terms and conditions as qualified able‐bodied person.

Employable only when necessary to prevent curtailment of employment opportunity.

No restrictions on employment. Must get equal opportunity and no unfair competition.

63


UST GOLDEN NOTES 2011 D. TERMINATION OF EMPLOYMENT 1.EMPLOYER‐EMPLOYEE RELATIONSHIP Q: What determines the existence of an employment relationship? A: It is determined by law and not by contract. Whether or not an Er‐Ee relationship exists between the parties is a question of fact. In this regard, the findings of the NLRC are accorded not only respect but finality if supported by evidence. Note: Taxi or jeepney drivers under the “boundary” system are Ee’s of the taxi or jeepney owners/operators; so also the passenger bus drivers and conductors. (Jardin vs. NLRC and Goodman Taxi, G.R. No. 119268, Feb. 23, 2000)

Q: The employment contract stipulates that there is no Er‐Ee relationship between the parties. Is that valid? A: No. The existence of an Er‐Ee relation is a question of law and being such, it cannot be made the subject of agreement. (Tabas v. California Manufacturing Co., G.R. No. L‐80680, Jan. 26, 1989) Q: Banco de Manila and the Ang Husay Janitorial and Pest Control Agency entered into an Independent Contractor Agreement with the usual stipulations: specifically, the absence of Er‐Ee relationship, and the relief from liability clauses. Can the bank, as a client, and the agency, as an independent contractor, stipulate that no Er‐Ee relationship exists between the bank and the Ees of the Agency who may be assigned to work in the Bank? Reason. A: Yes, they can stipulate provided the relationship is job contracting. However the stipulation cannot prevail over the facts and the laws. The existence of Er‐Ee relationship is determined by facts and law and not by stipulation of the parties. (Insular Life Assurance Co.. Ltd. v. NLRC, G.R. No. 119930, March 12,1998) Q: ASIA executed a 1‐year contract with the Baron Hotel (BARON) for the former to provide the latter with 20 security guards to safeguard the persons and belongings of hotel guests, among others. The security guards filled up Baron application form and submitted the executed forms directly to the Security Department of Baron. The pay slips of the security guards bore BARON's logo and showed that Baron deducted therefrom the amounts for SSS premiums, medicare contributions and withholding taxes. Assignments of security guards, who should be on duty or on call, promotions,

64

suspensions, dismissals and award citations for meritorious services were all done upon approval by BARON's chief security officer. After the expiration of the contract with ASIA, BARON did not renew the same and instead executed another contract for security services with another agency. ASIA placed the affected security guards on "floating status" on "no work no pay" basis. Having been displaced from work, the ASIA security guards filed a case against the BARON for illegal dismissal, overtime pay, minimum wage differentials, vacation leave and sick leave benefits, and 13th month pay. BARON denied liability alleging that ASIA is the employer of the security guards and therefore, their complaint for illegal dismissal and payment of money claims should be directed against ASIA. Nevertheless, BARON filed a Third Party Complaint against ASIA. Is there an Er‐Ee relationship between the BARON, on one hand, and the ASIA security guards, on the other hand? Explain briefly. A: As a general rule, the security guards of a private security guard agency are the employees of the latter and not of the establishment that has entered into a contract with the private security guard agency for security services. But under the facts in the question, Baron Hotel appear to have hired the security guards, to have paid their wages, to have the power to promote, suspend or dismiss the security guards and the power of control over them, namely, the security guards were under orders of Baron Hotel as regard their employment. Because of the above‐mentioned circumstances, Baron Hotel is the Er of the security guards. Q: Assuming that ASIA is the Er, is the act of ASIA in placing the security guards on "floating status" lawful? Why? A: It is lawful for a private security guard agency to place its security guard on a "floating status" if it has no assignment to give to said security guards. But if the security guards are placed on a "floating status" for more than 6 months, the security guards may consider themselves as having been dismissed. (1999 Bar Question) Q: Lacson was one of more than 100 Ees who were terminated from employment due to the closure of LBM Construction Corporation. LBM was a sister company of Lastimoso Construction, Inc. and RL Realty & Dev’t Corp. All 3 entities formed what came to be known as the Lastimoso Group of Companies. The 3 corporations were owned and controlled by members of the Lastimoso family; their incorporators and directors all belonged to


TERMINATION OF EMPLOYMENT the Lastimoso family. The 3 corporations were engaged in the same line of business, under one management, and used the same equipment including manpower services. Lacson and his co‐ Ees filed a complaint with the Labor Arbiter against LBM, RL Realty and Lastimoso Construction to hold them jointly and severally liable for backwages and separation pay. Lastimoso Construction, Inc. RL Realty & Development Corporation interposed a Motion to Dismiss contending that they are juridical entitles with distinct and separate personalities from LBM Construction Corporation and therefore, they cannot be held jointly and severally liable for the money claims of workers who are not their Ees. Rule on the motion to dismiss. Should it be granted or denied? Why? A: It is very clear that even if LBM Construction company, Lastimoso Construction Company, Inc. and RL Realty & Dev’t Corp. all belong to the Lastimoso family and are engaged in the same line of business under one management and used the same equipment including manpower services, these corporations were separate juridical entities. Thus, only the LBM Construction Corp. is the Er of Teofilo Lacson. The other corporation do not have any Er‐Ee relations with Lacson. The case in question does not include any fact that would justify piercing the veil of corporate fiction of the other corporations in order to protect the rights of workers. In a case (Concept Builders, Inc. v. NLRC, G.R. No. 108734, May 29, 1996) the SC ruled that it is a fundamental principle of corporation law that a corporation is an entity separate and distinct from its stockholders and from other corporations to which it may be connected. But this separate and distinct personality of a corporation is merely a fiction created by law for convenience and to promote justice. So, when the notion of separate juridical personality is used to defeat public convenience, justify wrong, protect fraud or defend crime, or is used as a device to defeat the labor laws, this separate personality of the corporation maybe disregarded or the veil of corporate fiction pierced. (1999 Bar Question) a.Four‐ fold test Q: What factors determine the existence of an Er‐ Ee relationship? A: The “four–fold test”: 1. 2. 3.

Selection and engagement of the employee; Payment of wages; Power of dismissal; and

4.

Power of control. (The Labor Code with Comments and Cases 2007, Azucena, Vol I, p.158)

Q: What is control test? A: The person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end. Note: However, in certain cases the control test is not sufficient to give a complete picture of the relationship between the parties, owing to the complexity of such a relationship where several positions have been held by the worker. The better approach is to adopt the two‐ tiered test. (Francisco vs. NLRC, G.R. No. 170087, Aug. 31, 2006)

Q: Genesis entered into a Career’s Agent Agreement with EmoLife Insurance Company, a domestic corporation engaged in insurance business. In the Agreement, it provides that the agent is an independent contractor and nothing therein shall be construed or interpreted as creating an employer‐ employee relationship. It further provides that the agent must comply with three requirements: (1) compliance with the regulations and requirements of the company; (2) maintenance of a level of knowledge of the company's products that is satisfactory to the company; and (3) compliance with a quota of new businesses. However, EmoLife insurance company terminated Genesis’ services. Genesis filed an illegal dismissal complaint alleging therein that an employer‐employee relationship exists and that he was illegally dismissed. Is he an employee of the insurance company? A: Genesis is not an employee of EmoLife Insurance Company. Generally, the determinative element is the control exercised over the one rendereing the service. The concept of “control” in Labor Code has to be compared and distinguished with “control” that must necessarily exist in a principal‐agent relationship. The employer controls the employee both in the results and in the means and manner of achieving this result. The principal in an agency relationship, e.g. insurance agent, on the other hand, also has the prerogative to exercise control over the agent in undertaking the assigned task based on the parameters outlined in the pertinent laws. In the present case, the Agreement fully serves as grant of authority to Genesis as EmoLife’s insurance agent. This agreement is supplemented by the company’s agency practices and usages, duly accepted by the agent in carrying out the agency. Foremost among these are the directives that the principal may impose on the agent to achieve the

65


UST GOLDEN NOTES 2011 assigned tasks, to the extent that they do not involve the means and manner of undertaking these tasks. The law likewise obligates the agent to render an account; in this sense, the principal may impose on the agent specific instructions on how an account shall be made, particularly on the matter of expenses and reimbursements. To these extents, control can be imposed through rules and regulations without intruding into the labor law concept of control for purposes of employment. (Gregorio Tongko v. ManuLife Insurance Company, G.R. No. 167622, Jun. 29, 2010) b.Two‐ tiered Test Q: What is the two‐tiered test? A: 1.

2.

The putative Er’s power to control the Ee with respect to the means and methods by which the work is to be accomplished; and The underlying economic realities of the activity or relationship.

Note: This two‐tiered test would provide us with a framework of analysis, which would take into consideration the totality of circumstances surrounding the true nature of the relationship between the parties. This is especially appropriate in this case where there is no written agreement or terms of reference to base the relationship on and due to the complexity of the relationship based on the various positions and responsibilities given to the worker over the period of the latter’s employment. (Francisco vs. NLRC, G.R. No. 170087, Aug. 31, 2006)

Q: What is the proper standard for economic dependence? A: The proper standard is whether the worker is dependent on the alleged employer for his continued employment in that line of business c.Probationary employment Q: What is probationary employment? A: Employment where the employee (Ee), upon his engagement: 1. 2.

Is made to undergo a trial period During which the Er determines his fitness to qualify for regular employment, 3. Based on reasonable standards made known to the Ee at the time of engagement. (Sec 6, Rule I, Book VI, IRR) Note: The services of an Ee who has been engaged on probationary basis may be terminated only for

66

just cause, when he fails to qualify as a regular Ee in accordance with reasonable standards prescribed by the Er. Q: Michelle Miclat was employed on a probationary basis as marketing assistant by Clarion Printing House but during her employment she was not informed of the standards that would qualify her as a regular employee (Ee). 30 days after, Clarion informed Miclat that her employment contract had been terminated without any reason. Miclat was informed that her termination was part of Clarion’s cost‐cutting measures. Is Miclat considered as a regular Ee and hence entitled to its benefits? A: Yes. Probationary employment shall be governed by the following rules: (d) In all cases of probationary employment, the Er shall make known to the Ee the standards under which he will qualify as a regular Ee at the time of his engagement. Where no standards are made known to the Ee at that time, he shall be deemed a regular Ee”. In the case at bar, she was deemed to have been hired from day one as a regular Ee. (Clarion Printing House Inc., vs. NLRC, G.R. No. 148372, June 27, 2005) Q: What are the characteristics of probationary employment? A: 1. It is an employment for a trial period; 2. It is a temporary employment status prior to regular employment; 3. It arises through a contract with the following elements: a. The employee (Ee) must learn and work at a particular type of work b. Such work calls for certain qualifications c. The probation is fixed d. The Er reserves the power to terminate during or at the end of the trial period e. And if the Ee has learned the job to the satisfaction of the Er, he becomes a regular Ee. Q: What is the period of probationary employment? A: GR: It shall not exceed 6 months. XPNs: 1. Covered by an apprenticeship or learnership agreement stipulating a different period


TERMINATION OF EMPLOYMENT 2.

3.

4.

5.

Voluntary agreement of parties (especially when the nature of work requires a longer period) The Er gives the(Ee a second chance to pass the standards set. (Mariwasa Manufacturing, Inc. v. Leogardo, Jr.,G.R. No. 74246, Jan. 26, 1989) When the same is required by the nature of the work, e.g. the probationary period set for professors, instructors and teachers is 3 consecutive years of satisfactory service pursuant to DOLE Manual of Regulations for Private Schools. When the same is established by company policy.

Note: Period of probation shall be reckoned from the date the Ee actually started working. (Sec.6 [b], Rule I, Book VI, IRR) After the lapse of the probationary period (6 months), Ee becomes regular. Probationary Ees may be dismissed before end of the probationary period.

Q: May the Er and Ee validly agree to extend the probationary period beyond 6 months? A: Yes. Such an extension may be lawfully agreed upon, despite the restrictive language of Art. 281. A voluntary agreement extending the original probationary period to give the Ee a second chance to pass the probation standards constitutes a lawful exception to the statutory limit. (Mariwasa Manufacturing, Inc. v. Leogardo, Jr., G.R. No. 74246, Jan.26, 1989) Note: By voluntarily agreeing to such an extension, the Ee waived any benefit attaching to the completion of the period if he still failed to make the grade during the period of extension. (Mariwasa Mfg. Inc. v. Hon. Leogardo, G.R. No. 74246, Jan.26, 1989)

Q: Is double or successive probation allowed? A: No. The evil sought to be prevented is to discourage scheming employers from using the system of double or successive probation to circumvent the mandate of the law on regularization and make it easier for them to dismiss their employees. (Holiday Inn Manila v. NLRC, G.R. No. 109114, Sep. 14, 2003) Q: Middleby Phils. Corp. hired Alcira as eng’g support services supervisor on a probationary basis for 6 months. Apparently unhappy with Alcira’s performance, Middleby terminated his services. Alcira contends that he was already a regular employee (Ee) when he was terminated.

According to Alcira’s computation, since Art. 13 of the Civil Code provides that 1 month is composed of 30 days, 6 months totaling 180 days, then his th 180 day would fall on Nov. 16, ‘96 making him a regular Ee before his termination. Is the contention of the petitioner in the computation of 6 months correct? A: No, the computation of the 6‐month probationary period is reckoned from the date of appointment up to the same calendar date of the th 6 month following. In short, since the number of days in each particular month was irrelevant, Alcira was still a probationary Ee when Middleby opted not to “regularize” him on Nov. 20, 1996. (Alcira v. NLRC, G.R. No. 149859, June 9, 2004) Note: In Mitsubishi Motors v. Chrysler Phils. Labor Union, G.R. No. 148738, June 29, 2004, the SC ruled in this wise: “Applying Art. 13 of the Civil Code, the probationary period of 6‐months consists of the 180 days. This is in conformity with par.1, Art. 13 of the Civil Code. The number of months in the probationary period, 6, should then be multiplied by the number of days within a month, 30; hence, the period of 180 days. As clearly provided for the in last par. of Art. 13, in computing a period, the first day shall be excluded and the last day included. Thus, the 180 days commenced on May 27, 1996, and ended on Nov. 23, 1996. The termination letter dated Nov. 25, 1996 was served on Paras only on Nov. 26, 1996. He was, by then already a regular Ee of the company under Art. 281 of the LC.” How to resolve the conflict between the Alcira and Mitsubishi Motors case 1. Statutory Construction – The latter case prevails (Mitsubishi Motors); or 2. Rule more favorable to the Ee – use the computation which would amount to granting the subject Ee regular employment status (based on Constitutional and statutory provisions for the liberal interpretation of labor laws)

Q: What is the purpose of the period? A: To afford the employer an opportunity to observe the fitness of a probationary employee at work. Q: In what instances is a probationary employee (Ee) deemed a regular Ee? A: 1.

If he is allowed to work after a probationary period. (Art. 281)

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If no standards, under which he will qualify as a regular Ee, are made known to him at the time of his engagement. (Sec. 6 [d], Rule I, Book VI, IRR)

Q: What are the grounds for terminating probationary employment? A: 1. 2.

Just/authorized causes When he fails to qualify as a regular Ee in accordance with reasonable standards made known by the employer (Er) to the Ee at the time of his engagement (ICMC v. NLRC, G.R. No. 72222, Jan. 30, 1989)

Note: While probationary Ees do not enjoy permanent status, they are afforded the security of tenure protection of the Constitution. Consequently, they cannot be removed from their positions unless for cause. Such constitutional protection, however, ends upon the expiration of the period stated in their probationary contract of employment. Thereafter, the parties are free to renew the contract or not. (CSA v. NLRC, G.R. No. 87333, Sep. 6, 1991)

Q: What are the limitations on the employer’s (Er’s) power to terminate a probationary employment contract? A: 1.

2.

3.

4.

The power must be exercised in accordance with the specific req’ts of the contract If a particular time is prescribed, the termination must be within such time and if formal notice is required, then that form must be used The Er’s dissatisfaction must be real and in good faith, not feigned so as to circumvent the contract or the law There must be no unlawful discrimination in the dismissal

Note: The probationary employee is entitled to procedural due process prior to dismissal from service.

Q: R.L. Cruz was employed as gardener by Manila Hotel on “probation status” effective Sep. 22, ‘76. The appointment signed by Cruz provided for a 6 month probationary period. On Mar. 20, ‘77, or a day before the expiration of the probationary period, Cruz’s was promoted to lead gardener position. On the same day Cruz’ position was “abolished” by Manila Hotel allegedly due to economic reverses or business recession, and to salvage the enterprise from imminent danger of collapse. Was Cruz illegally dismissed?

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A: Yes, there is no dispute that as a probationary employee (Ee), Cruz had but limited tenure. Although on probationary basis, however, Cruz still enjoys the constitutional protection on security of tenure. During his tenure of employment, therefore, or before his contract expires, Cruz cannot be removed except for cause as provided for by law. What makes Cruz’ dismissal highly suspicious is that it took place at a time when he needs only but a day to be eligible as a regular Ee. That he is competent finds support in his being promoted to a lead gardener in so short span of less than 6 months. By terminating his employment or abolishing his position with but only one day remaining in his probationary appointment, the hotel deprived Cruz of qualifying as a regular Ee with its concomitant rights and privileges. (Manila Hotel Corp. v. NLRC, G.R. No. L‐53453, Jan. 22, 1986) Q: Colegio San Agustin (CSA) hired the Gela Jose as a grade school classroom teacher on a probationary basis for SY ‘84 – ‘85. Her contract was renewed for SY’s ‘85‐‘86 and ‘86‐‘87. On Mar. 24, ‘87, the CSA wrote the Gela that "it would be in the best interest of the students and their families that she seek employment in another school or business concern for next school year". Notwithstanding the said notice, the CSA still paid Gela her salary for April 15 to May 15, 1987. On April 6, ‘87, Gela wrote the CSA and sought reconsideration but she received no reply. Thereafter, she filed a complaint for illegal dismissal. Was Gela illegally dismissed? A: No. The Faculty Manual of CSA underscores the completion of 3 years of continuous service at CSA before a probationary teacher acquires tenure. Hence, the Gela cannot claim any vested right to a permanent appointment since she had not yet achieved the prerequisite 3‐year period under the Manual of Regulation for Private Schools and the Faculty Manual of CSA. In the instant case where the CSA did not wish to renew the contract of employment for the next school year, the Gela has no ground to protest. She was not illegally dismissed. Her contract merely expired. (CSA v. NLRC, G.R No. 87333, Sep. 6, 1991) Q: During their probationary employment, 8 Ees were berated and insulted by their supervisor. In protest, they walked out. The supervisor shouted at them to go home and never to report back to work. Later, the personnel manager required them to explain why they should not be dismissed from employment for abandonment and failure to qualify for the positions applied for. They filed


TERMINATION OF EMPLOYMENT a complaint for illegal dismissal against their Er. As a LA, how will you resolve the case? A: As a LA I will resolve the case in favor of the 8 probationary Ees due to the ff:: 1.

2.

3.

4.

5.

Probationary Ees also enjoy security of tenure. (Biboso v. Victoria Milling, G.R. No. L‐44360, Mar. 31, 1977) In all cases involving Ees on probationary status, the Er shall make known to the Ee at the time he is hired, the standards by which he will qualify for the positions applied for. The filing of the complaint for illegal dismissal effectively negates the Ers theory of abandonment. (Rizada v. NLRC, G.R. No. 96982, Sep. 21, 1999) The order to go home and not to return to work constitutes dismissal from employment. The 8 probationary Ees were terminated without just cause and without due process

In view of the foregoing, I will order reinstatement to their former positions without loss of seniority rights with full backwages, plus damages and atty’s fees. (2006 Bar Question) d.Kinds of employment (1)Regular employment Q: What is regular employment? A: 1. An employment shall be deemed to be regular where the Ee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the Er, the provisions of written agreements to the contrary notwithstanding and regardless of the oral agreements of the parties. (Sec. 5 [a], Rule I, Book VI, IRR) 2. Any Ee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular Ee with respect to the activity in which he is employed and his employment shall continue while such activity exists. (Sec. 5 [b], Rule I, Book VI, IRR) Note: Regularization is not a management prerogative; rather, it is the nature of employment that determines it. It is a mandate of the law. (PAL v. Pascua, G.R. No. 143258, Aug. 15, 2003)

Regular employment does not mean permanent employment. A probationary Ee becomes a regular Ee after 6 months. A regular Ee may only be terminated for just/authorized causes. The practice of entering into employment contracts which would prevent the workers from becoming regular should be struck down as contrary to public policy and morals. (Universal Robina Corp. v. Catapang, G.R. No. 164736, Oct. 14, 2005)

(a)Reasonable connection rule Q: What is the test to determine regular employment? A: 1.

The primary standard of determining regular employment is the reasonable connection between the particular activity performed by the employee (Ee) to the usual trade or business of the employer. The test is whether the former is usually necessary or desirable in the usual business or trade of the Er. (De Leon v. NLRC, G.R. No. 70705, Aug. 21, 1989) Note: The connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. (Highway Copra Traders v. NLRC, G.R. No. 108889, July 30, 1998)

2.

Also, the performance of a job for at least a year is sufficient evidence of the job’s necessity if not indispensability to the business. This is the rule even if its performance is not continuous and merely intermittent. The employment is considered regular, but only with respect to such activity and while such activity exists. (Universal Robina Corp. v. Catapang, G.R. No. 164736, Oct. 14, 2005).

Note: The status of regular employment attaches to the casual Ee on the day immediately after the end of his first year of service. The law does not provide the qualification that the Ee must first be issued a regular appointment or must first be formally declared as such before he can acquire a regular status. (Aurora Land Projects Corp. v. NLRC, G.R. No. 114733, Jan. 2, 1997)

Q: Is the mode of compensation determinative of regular employment? A: No, while the Ees mode of compensation was on a “per piece basis” the status and nature of their employment was that of regular Ees. (Labor

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UST GOLDEN NOTES 2011 Congress of the Phils v. NLRC, G.R. No. 123938, May 21, 1998) Q: When does Art. 280 not apply? A: It does not apply in case of OFWs. Note: Seafarers cannot be considered as regular Ees. Their employment is governed by the contracts they sign everytime they are hired and their employment terminated when the contract expires. Their employment is fixed for a certain period of time. (Ravago v. Esso Eastern Maritime Ltd., G.R. No. 158324, Mar. 14, 2005)

Q: Moises was employed by La Tondeña at the maintenance section of its Eng’g Dep’t paid on a daily basis through petty cash vouchers. His work consisted mainly of painting company building and equipment and other odd jobs relating to maintenance. After a service of more than 1 year, Moises requested that he be included in the payroll of regular workers, instead of being paid through petty cash vouchers. Instead La Tondeña’s dismissed Moises and claimed that Moises was contracted on a casual basis specifically to paint certain company buildings and that its completion terminated Moises’ employment. Can Moises be considered as a regular Ee? A: Yes, the law demands that the nature and entirety of the activities performed by the Ee be considered. Here, the painting and maintenance work given Moises manifests a treatment consistent with a maintenance man and not just a painter, for if his job was only to paint a building there would be no basis for giving him other work assignments in‐between painting activities. It is not tenable to argue that the painting and maintenance work of Moises are not necessary in La Tondeña’s business of manufacturing liquors; otherwise, there would be no need for the regular maintenance section of the company’s eng’g dep’t. (De Leon v. NLRC, G.R. No. 70705, Aug. 21, 1989) Q: Honorio Dagui was hired by Doña Aurora Suntay Tanjangco in 1953 to take charge of the maintenance and repair of the Tanjangco apartments and residential bldgs. He was to perform carpentry, plumbing, electrical and masonry work. Upon the death of Doña Aurora Tanjangco in ‘82 her daughter, Teresita Tanjangco Quazon, took over the administration of all the Tanjangco properties, and dismissed Dagui. Is Honorio Dagui a regular employee (Ee)? A: Yes. The jobs assigned to Dagui as maintenance man, carpenter, plumber, electrician and mason

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were directly related to the business of the Tanjangco’s as lessors of residential and apartment bldgs. Moreover, such a continuing need for his services by the Tanjangcos is sufficient evidence of the necessity and indispensability of his services to their business or trade. Dagui should likewise be considered a regular Ee by the mere fact that he rendered service for the Tanjangcos for more than one year, that is, beginning ‘53 until ‘82, under Doña Aurora; and then from 1982 up to June 8, ‘91 under the daughter, for a total of 29 and 9 years respectively. Owing to Dagui's length of service, he became a regular Ee, by operation of law, one year after he was employed in ‘53 and subsequently in ‘82. (Aurora Land Projects Corp. v. NLRC, G.R. No. 114733, Jan. 2, 1997) Q: A total of 43 Ees who are deaf‐mutes were hired and re‐hired on various periods by Far East Bank and Trust Co. as money sorters and counters through a uniformly worded agreement called “Employment Contract for Handicapped Workers.” The company disclaimed that these Ees were regular Ees and maintained among others that they are a special class of workers, who were hired temporarily under a special employment arrangement which was a result of overtures made by some civic and political personalities to the Bank. Should the deaf‐mute Ees be considered as regular Ees? A: Yes. The renewal of the contracts of the handicapped workers and the hiring of others leads to the conclusion that their tasks were beneficial and necessary to the bank. It also shows that they were qualified to perform the responsibilities of their positions; their disability did not render them unqualified or unfit for the tasks assigned to them. The Magna Carta for Disabled Persons mandates that a qualified disabled Ee should be given the same terms and conditions of employment as a qualified able‐bodied person. The fact that the Ees were qualified disabled persons necessarily removes the employment contracts from the ambit of Art. 80. Since the Magna Carta accords them the rights of qualified able‐bodied persons, they are thus covered by Art. 280 of the LC. (Bernardo v. NLRC, G.R. No. 122917, July 12, 1999) Q: Coca‐Cola Bottlers Phils, Inc., (CCBPI) engaged the services of the workers as “sales route helpers” for a period of 5 months. After 5 months, the workers were employed by the company on a day‐to‐day basis. According to the company, the workers were hired to substitute for regular route helpers whenever the latter would be unavailable


TERMINATION OF EMPLOYMENT or when there would be an unexpected shortage of manpower in any of its work places or an unusually high volume of work. The practice was for the workers to wait every morning outside the gates of the sales office of the company, if thus hired, the workers would then be paid their wages at the end of the day. Should the workers be considered as regular employees (Ees) of CCBPI? A: Yes, the repeated rehiring of the workers and the continuing need for their services clearly attest to the necessity or desirability of their services in the regular conduct of the business or trade of the company. The fact that the workers have agreed to be employed on such basis and to forego the protection given to them on their security of tenure, demonstrate nothing more than the serious problem of impoverishment of so many of our people and the resulting unevenness between labor and capital. (Magsalin & Coca‐Cola v. N.O.W.M., G.R. No. 148492, May 9, 2003) Q: Metromedia Times Corp. entered, for the fifth time, into an agreement with Efren Paguio, appointing him to be an account executive of the firm. He was to solicit advertisements for “The Manila Times,”. The written contract between the parties provided that, “You are not an Ee of the Metromedia Times Corp. nor does the company have any obligations towards anyone you may employ, nor any responsibility for your operating expenses or for any liability you may incur. The only rights and obligations between us are those set forth in this agreement. This agreement cannot be amended or modified in any way except with the duly authorized consent in writing of both parties.” Is Efren Paguio a regular employee of Metromedia Times Corporation? A: Yes, he performed activities which were necessary and desirable to the business of the Er, and that the same went on for more than a year. He was an account executive in soliciting advertisements, clearly necessary and desirable, for the survival and continued operation of the business of the corp. The corporation cannot seek refuge under the terms of the agreement it has entered into with Efren Paguio. The law, in defining their contractual relationship, does so, not necessarily or exclusively upon the terms of their written or oral contract, but also on the basis of the nature of the work of Efren has been called upon to perform. A stipulation in an agreement can be ignored as and when it is utilized to deprive the Ee of his security of tenure. (Paguio v. NLRC, G.R. No. 147816, May 9, 2003)

(2)Project Employment Q: What is project employment? A: Employment that has been fixed for a specific project or undertaking the completion for which has been determined at the time of engagement of the employee (Ee). (Sec.5 [a], Rule I, Book VI, IRR). The period is not the determining factor, so that even if the period is more than 1 year, the Ee does not necessarily become regular. Note: Where the employment of a project Ee is extended long after the supposed project has been finished, the Ees are removed from the scope of project Ees and considered as regular Ees. Repeated hiring on a project‐to‐project basis is considered necessary and desirable to the business of the Er. The Ee is regular (Maraguinot v. NLRC, G.R. No. 120969, Jan. 22, 1998 ). However, repeated hiring does not necessarily mean regular employment. (Filipinas Pre‐Fabricated Building Systems (FILSYSTEMS), Inc. v. Puente, G.R. No. 153832,. March 18, 2005 )

(a)Indicators of project employment Q: What are the Indicators of Project Employment? A: Either one or more of the following circumstances, among others, may be considered as indicators that an employee is a project employee. (Hanjin v. Ibañez, G.R. No. 170181, June 26, 2008) a. The duration of the specific/identified undertaking for which the worker is engaged is reasonably determinable b. Such duration, as well as the specific work/service to be performed, is defined in an employment agreement and is made clear to the employee at the time of hiring. Note: Absent any other proof that the project employees were informed of their status as such, it will be presumed that they are regular employees.

c.

d.

The work/service performed by the employee is in connection with the particular project/undertaking for which he is engaged The employee, while not employed and awaiting engagement, is free to offer his services to any other employer

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UST GOLDEN NOTES 2011 e.

The termination of his employment in the particular project/undertaking is reported to the Department of Labor and Employment Regional Office having jurisdiction over the workplace within 30 days following the date of his separation from work, using the prescribed form on employees’ termination/dismissal/suspensions

f.

An undertaking in the employment contract by the employer to pay completion bonus to the project employee as practiced by most construction companies Q: What are the requisites in determining whether an employee (Ee) is a project Ee? A: 1. The project Ee was assigned to carry out a specific project or undertaking, and 2. The duration and scope of which were specified at the time the Ee was engaged for that project. (Imbuido v. NLRC, G.R. No. 114734, Mar. 31, 2000) 3. The Ee must have been dismissed every after completion of his project or phase 4. Report to the DOLE of Ee’s dismissal on account of completion of contract (Policy Inst. No. 20; D.O. 19 [1997]) Q: What is a project? A: A "project" has reference to a particular job or undertaking that may or may not be within the regular or usual business of the Er. In either case, the project must be distinct, separate and identifiable from the main business of the Er, and its duration must be determined or determinable (PAL v. NLRC, G.R. No. 125792, Nov. 9, 1998). Q: Can a project employee (Ee) or a member of a work pool acquire the status of a regular Ee? A: Yes, when the following concur: 1. There is a continuous rehiring of project Ee’s even after cessation of a project; and 2. The tasks performed by the alleged “project Ee” are vital, necessary and indispensable to the usual business or trade of the employer (Er). Note: The length of time during which the Ee was continuously re‐hired is not controlling, but merely serves as a badge of regular employment. Enero and Maraguinot have been employed for a period of not less than 2 years and have been involved in at least 18

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projects. These facts are the basis in considering them as regular Ees of the company. (Maraguinot v. NLRC, G.R. No. 120969, Jan. 22, 1998) Members of a work pool from which a construction company draws its project Ees, if considered Ees of the construction company while in the work pool, are non‐ project Ees or Ees for an indefinite period. If they are employed in a particular project, the completion of the project or any phase thereof will not mean severance of Er‐Ee relationship. Unless the workers in the work pool are free to leave any time and offer their services to other Ers. (L.T. Datu & Co., Inc. v. NLRC, G.R. No. 113162, Feb. 9, 1996)

Q: What is the “day certain” rule? A: It states that a project employment that ends on a certain date does not end on an exact date but upon the completion of the project. Q: Are project Ees entitled to separation pay? A: GR: Project Ees are not entitled to separation pay if they are terminated as a result of the completion project. XPN: If the projects they are working on have not yet been completed when their services are terminated; project Ees also enjoy security of tenure during the limited time of their employment. (De Ocampo v. NLRC, G.R. No. 81077, June 6, 1990) Q: Roger Puente was hired by Filsystems, Inc., initially as an installer and eventually promoted to mobile crane operator, and was stationed at the company’s premises. Puente claimed in his complaint for illegal dismissal, that his work was continuous and without interruption for 10 years, and that he was dismissed from his employment without any cause. Filsystems on its part averred that Puente was a project Ee in the company’s various projects, and that after the completion of each project, his employment was terminated, and such was reported to the DOLE. Is Roger Puente a regular Ee? A: No, Puente is a project Ee. The contracts of employment of Puente attest to the fact that he was hired for specific projects. His employment was coterminous with the completion of the projects for which he had been hired. Those contracts expressly provided that his tenure of employment depended on the duration of any phase of the project or on the completion of the construction projects. Furthermore, the company regularly submitted to the labor dep’t reports of the termination of services of project workers. Such compliance with


TERMINATION OF EMPLOYMENT the reportorial req’t confirms that Puente was a project Ee. The mere rehiring of Puente on a project‐to‐project basis did not confer upon him regular employment status. “The practice was dictated by the practical consideration that experienced construction workers are more preferred.” It did not change his status as a project Ee. (Filipinas Pre‐Fabricated Building Systems (FILSYSTEMS), Inc. v. Puente, G.R. No. 153832, Mar. 18, 2005) (3)Seasonal employment Q: What is seasonal employment? A: Employment where the job, work or service to be performed is seasonal in nature and the employment is for the duration of the season. (Sec.5 [a], Rule I, Book VI, IRR) An employment arrangement where an employee (Ee) is engaged to work during a particular season on an activity that is usually necessary or desirable in the usual business or trade of the employer (Er). Note: For seasonal Ees, their employment legally ends upon completion of the project or the season. The termination of their employment cannot and should not constitute an illegal dismissal. (Mercado v. NLRC, G.R. No. 79869, Sept. 5, 1991) One year duration on the job is pertinent in deciding whether a casual Ee has become regular or not, but it is not pertinent to a seasonal or project Ee. Passage of time does not make a seasonal worker regular or permanent. (Mercado v. NLRC, G.R. No. 78969, Sep. 5, 1991) During off‐season, the relationship of Er‐Ee is not severed; the seasonal Ee is merely considered on LOA without pay. Seasonal workers who are repeatedly engaged from season to season performing the same tasks are deemed to have acquired regular employment. (Hacienda Fatima v. National Federation of Sugarcane Workers‐Food and General Trade, G.R. No. 149440, Jan. 28, 2003)

Q: Are seasonal Ees entitled to separation pay? A: When the business establishment is sold which effectively terminates the employment of the seasonal Ees, the latter would be entitled to separation pay. Q: Can seasonal employees (Ees) be considered as regular Ees? A: Yes. The fact that seasonal Ees do not work continuously for one whole year but only for the

duration of the season does not detract from considering them in regular employment. Seasonal workers who are called to work from time to time and are temporarily laid off during off‐season are not separated from service in that period, but merely considered on leave until re‐employed. If the Ee has been performing the job for at least a year, even if the performance is not continuous and merely intermittent, the law deems repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the employment is considered regular, but only with respect to such activity and while such activity exists. (Benares v. Pancho, G.R. No. 151827, April 29, 2005) Q: Carlito Codilan and Maximo Docena had been working for the rice mill for 25 years, while Eugenio Go, Teofilo Trangria and Reynaldo Tulin have been working for 22, 15, and 6 years respectively. The operations of the rice mill continue to operate and do business throughout the year even if there are only two or three harvest seasons within the year. This seasonal harvesting is the reason why the company considers the workers as seasonal Ees. Is the company correct in considering the Ees as seasonal Ees? A: No, the fact is that big rice mills such as the one owned by the company continue to operate and do business throughout the year even if there are only two or three harvest seasons within the year. It is a common practice among farmers and rice dealers to store their palay and to have the same milled as the need arises. Thus, the milling operations are not seasonal. Finally, considering the number of years that they have worked, the lowest being 6 years, the workers have long attained the status of regular Ees as defined under Art. 280. (Tacloban Sagkahan Rice Mill v. NLRC, G.R. No. 73806, Mar. 21, 1990) (4)Casual employment Q: What is casual employment? A: 1. It is an employment where the Ee is engaged in an activity which is not usually necessary or desirable in the usual business or trade of the Er, provided: such employment is not project nor seasonal (Art. 281). Note: But despite the distinction between regular and casual employment, every Ee shall be entitled to the same rights and privileges, and

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UST GOLDEN NOTES 2011 shall be subject to the same duties as may be granted by law to regular Ees during the period of their actual employment.

2.An Ee is engaged to perform a job, work or service which is merely incidental to the business of the Er, and such job, work or service is for a definite period made known to the Ee at the time of engagement (Sec. 5 [b], Rule I, Book VI, IRR) Note: If he has rendered at least 1 year of service, whether such service is continuous or broken, he is considered as regular Ee with respect to the activity in which he is employed and his employment shall continue while such activity exists. A Casual Ee is only casual for 1 year, and it is the passage of time that gives him a regular status. (KASAMMA‐CCO v. CA, G.R. No. 159828, April 19, 2006) The purpose is to give meaning to the constitutional guarantee of security of tenure and right to self‐organization. (Mercado v. NLRC, G.R. No. 79868, Sep. 5, 1991)

Q: Yakult Phils. is engaged in the manufacture of cultured milk. The workers were hired to cut cogon grass and weeds at the back of the factory building used by Yakult. They were not required to work on fixed schedule and they worked on any day of the week on their own discretion and convenience. The services of the workers were terminated by Yakult on less than 1‐year after. May casual or temporary Ees be dismissed by the Er before the expiration of the 1‐year period of employment? A: Yes, the usual business or trade of Yakult Phils. is the manufacture of cultured milk. The cutting of the cogon grasses in the premises of its factory is hardly necessary or desirable in the usual business of the Yakult. The workers are casual Ees. Nevertheless, they may be considered regular Ees if they have rendered services for at least 1 year. When, as in this case, they were dismissed from their employment before the expiration of the 1‐year period they cannot lawfully claim that their dismissal was illegal. (Capule, et al. v. NLRC, G.R. No. 90653, Nov. 12, 1990) Q: How is the project worker different from a casual or contractual worker? Briefly explain your answers.

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A: PROJECT WORKER Used to designate workers in the construction industry, hired to perform a specific undertaking for a fixed period, co‐ terminus with a project or phase thereof determined at the time of the engagement of the Ee To be considered a true project worker, it is required that a termination report be submitted to the nearest public employment office upon the completion of the construciton project. (Aurora Land Projects Corp. v. NLRC, G.R. No. 114733, Jan. 2, 1997)

CASUAL or CONTRACTUAL WORKER

Generic term used to designate any worker covered by a wrtitten contract to perform a specific undertaking for a fixed period

There is no such requirement for an ordinary contractual worker

(5)Fixed term employment; Requisites for validity Q: What is the nature of term employment? A: A contract of employment for a definite period terminates by its own terms at the end of such period. (Brent School v. Zamora, G.R. No. L‐48494, Feb. 5, 1990) Q: What is the decisive determinant in term employment? A: It is the day certain agreed upon by the parties for the commencement and the termination of their employment relation. Q: What is a fixed‐term employment? A: It is an employment where a fixed period of employment was agreed upon: 1. Knowingly and voluntarily by the parties, 2. Without any force, duress or improper pressure being brought to bear upon the employee (Ee) and 3. Absent any other circumstances vitiating his consent, or 4. Where it satisfactorily appears that the Er and Ee dealt with each other on more or less equal terms with no moral


TERMINATION OF EMPLOYMENT dominance whatever being exercised by the former over the latter. (Brent School, Inc. v. Zamora, G.R. No. 48494, Feb. 5, 1990) Note: A fixed‐period Ee does not become a regular Ee because his employment is co‐terminus with a specific period of time. Ee hired on a fixed‐term is regular if job is necessary and desirable to the business of Er. (Philips Semiconductor v. Fadriquela, G.R. No. 141717, April 2004)

Q: Is “term employment” a circumvention of the law on security of tenure? A: No, it is not a circumvention of the law if it follows the requisites laid down by the Brent ruling. (Romares v. NLRC, G.R. No. 122327, Aug. 19, 1998) Q: Rene was hired as an athletic director in ChristOmarDiviva School for a period of five years. As such, he oversees the work of coaches and related staff involved in intercollegiate or interscholastic athletic programs. However, he was not rehired upon the expiration of said period. Rene questions his termination alleging that he was a regular employee and could not be dismissed without valid cause. Is he a regular employee? A: No. Rene was not a regular employee but an employee under a fixed‐ term contract. While it can be said that the services he rendered were usually necessary and desirable to the business of the school, it cannot also be denied that his employment was for a fixed term of five years. The decisive determinant in fixed‐ term employment should not be the activities that the employee is called upon to perform, but the day certain agreed upon by the parties for the commencement and termination of their employment relation (Brent School Inc. v. Zamora, G.R. No. 48494, Feb. 5, 1990). Q: In the above‐ mentioned facts, will Rene automatically become a regular employee if he is rehired by the school for another definite period of employment? A: No. The decisive determinant in term employment is the day certain agreed upon by the parties for the commencement and termination of their employment relationship, a day certain being understood to be that which must necessarily come, although it may not be known when and not whether the work is usually necessary and desirable to the business of the employer.

Q: Does the “Reasonable Connection Rule” applies in fixed‐ term employment for a fixed‐ term employee be eventually classified as regular employee? A: No. It should be apparent that this settled and familiar notion of a period, in the context of a contract of employment, takes no account at all of the nature of the duties of the employee; it has absolutely no relevance to the character of his duties as being usually necessary and desirable to the usual business of the employer, or not. Q: Dean Jose and other employees are holding administrative positions as dean, dep’t heads and institute secretaries. In the implementation of the Reorganization, Retrenchment and Restructuring program effective Jan. 1, 1984, Dean Jose and other employees were retired but subsequently rehired. Their appointment to their administrative positions as dean, dep’t heads and institute secretaries had been extended by the company from time to time until the expiration of their last appointment on May 31, 1988. Were Dean Jose and other employees illegally dismissed? A: No. Petitioners were dismissed by reason of the expiration of their contracts of employment. Petitioners' appointments as dean, dep’t heads and institute secretaries were for fixed terms of definite periods as shown by their respective contracts of employment, which all expired on the same date, May 31, 1988. The validity of employment for a fixed period has been acknowledged and affirmed by the SC. (Blancaflor v. NLRC, G.R. No. 101013, Feb. 2, 1993) e.Job contracting and labor‐ only contracting Q: When is there “job contracting”? A: Specifically, there is “job contracting” where: 1. The contractor carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof; and 2. The contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises, and other materials which

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UST GOLDEN NOTES 2011 are necessary in the conduct of his business.

Phils., Inc., G.R. No. 179807, July 31, 2009, J. Carpio‐Morales)

Q: When is there “labor‐only” contracting?

Q: What are the factors to consider in determining whether contractor is carrying on an independent business?

A: A person is deemed to be engaged in “labor‐ only” contracting where: 1. The person supplying workers to an employer does not have substantial capital or investment in the for of tools, equipment, machineries, work premises, among others; and 2. The workers recruited and placed by such person are performing activities which are directly related to the principal business of such employer. (Baguio v. NLRC, G.R. No. 79004‐08, Oct. 4, 1991)

A: 1. 2. 3. 4. 5. 6. 7. 8. 9.

Q: What is a permissible job contracting or subcontracting? A: It refers to an arrangement whereby a principal agrees to farm out with a contractor or subcontractor the performance of a specific job, work, or service within a definite or predetermined period, regardless of whether such job, work or, service is to be performed or completed within or outside the premises of the principal. Q: What are the conditions that must be met in order to be considered as permissible job contracting or subcontracting? A: The following conditions must be met: 1. The contractor carries on a distinct and independent business and undertakes the contract work on his account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of his work except as to the results thereof; 2. The contractor has substantial capital or investment; and 3. The agreement between the principal and contractor or subcontractor assures the contractual employees entitlement to all labor and occupational safety and health standards, free exercise of the right to self‐organization, security of tenure, and social welfare benefits. (Gallego v. BAYER

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Nature and extent of work Skill required Term and duration of the relationship Right to assign the performance of specified pieces of work Control and supervision of worker Power of employer to hire, fire and pay wages Control of the premises Duty to supply premises, tools, appliances, materials and labor Mode, manner and terms of payment. (Vinoya v. NLRC, G.R. No. 126286, Feb 2, 2000)

Note: Individuals with special skills, expertise or talent enjoy the freedom to offer their services as independent contractors. An individual like an artist or talent has a right to render his services without any one controlling the means and methods by which he performs his art or craft. (Sonza vs. ABS‐CBN, G.R. No. 138051, June 10, 2004)

Q: Who are the parties in contracting and subcontracting? A: 1. Contractor/subcontractor – Refers to any person engaged in a legitimate contracting or subcontracting arrangement. 2. Contractual Ee – One who is employed by a contractor or subcontractor to perform or complete a job, work, or service pursuant to an arrangement between the latter and a principal. (D.O. 18‐02) 3. Principal – Any Er who puts out or farms out a job, service, or work to a contractor or subcontractor. Q: Describe the relationship arising from contractual arrangements. A: There is a trilateral relationship between the principal, contractor and Ee. There exists a contractual relationship between the principal and the contractor or subcontractor to its Ees. Q: What are the rights of a contractual Ee (CEe)?


TERMINATION OF EMPLOYMENT A: They shall be entitled to all the rights and privileges due to a regular Ee as provided in the LC, as amended to include the ff: 1. 2.

3. 4.

Safe and healthful working conditions Service Incentive Leave, rest days, OT pay, holiday pay, 13th month pay and separation pay Social security and welfare benefits; Self‐organization, CBA and peaceful concerted actions Security of tenure (Sec. 8, DO 18‐02)

5. Q: What are the effects of termination of CEe to separation pay and other benefits? A: 1. If prior to the expiration of the employment contract between the principal and the contractor or subcontractor – The right of CEe to separation pay or other related benefits shall be governed by the applicable laws and jurisprudence on termination of employment 2. If the termination results from the expiration of the contract between the principal and the contractor or subcontractor – The Ee shall not be entitled to separation pay. However, this is w/o prejudice to completion bonuses or other emoluments including retirement pay as may be provided by law or in the contract between the principal and the contractor. Q: When is the principal deemed the employer of the contractual employee? A: Where: 1. There is labor‐only contracting 2. The contracting arrangement falls within the prohibited acts Q: May the Er or indirect Er require the contractor or subcontractor to furnish a bond equal to the cost of labor under contract to answer for the wages due to Ees in case the contractor or subcontractor fails to pay the same? A: Yes. The Er or indirect Er may require the contractor or subcontractor to furnish a bond that will answer for the wages due to the Ees. Q: What is the liability of the principal?

A: The principal shall be solidarily liable with the contractor in the event of any violation of any provision of the LC, including the failure to pay wages. This will not prevent the principal from claiming reimbursement from the contractor. Q: What does substantial capital or investment mean? A: It refers to the capital stocks and subscribed capitalization in case of corporations, tools, equipments, implement, machineries and work premises, actually and directly used by the contractor or subcontractor in the performance or completion of the job, work or service contracted out. (D.O. 18‐02) Note: The law does not require both substantial capital and investment in the form of tools, equipments, machineries, etc. This is clear from the use of conjunction “or”. If the contention was to require the contractor to prove that he has both capital and requisite investment, then the conjunction “and” should have been used. (Virginia Neri v. NLRC, G.R. No. 97008, July 21, 1993)

Q: What does the right to control mean? A: It refers to the right reserved to the person for whom the services of the contractual workers are performed, to determine not only the end to be achieved, but also the manner and means to be used in reaching that end. (D.O. 18‐02) Q: SMC and Sunflower Cooperative entered into a 1‐yr Contract of Services, to be renewed on a month to month basis until terminated by either party. Pursuant to the contract, Sunflower engaged private respondents to render services at SMC’s Bacolod Shrimp Processing Plant. The contract was deemed renewed by the parties every month after its expiration on Jan. 1, ‘94 and respondents continued to perform their tasks until Sep. 11, ‘95. In July ‘95, private respondents filed a complaint before the NLRC, praying to be declared as regular Ees of SMC, with claims for recovery of all benefits and privileges enjoyed by SMC rank and file Ees. Respondents subsequently filed an Amended Complaint to include illegal dismissal as additional cause of action following SMC’s closure of its Bacolod Shrimp Processing Plant on which resulted in the termination of their services. SMC filed a Motion for Leave to File Attached Third rd Party Complaint to implead Sunflower as 3 ‐Party Defendant. Are private respondents Ees of the independent cooperative contractor (Sunflower) or of the SMC?

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UST GOLDEN NOTES 2011 A: The contention of SMC holds no basis. Using the “substantial capital” doctrine and the “right of control test”, the Court found that the Sunflower had no substantial capital in the form of tools, equipment, machineries, work premises and other materials to qualify itself as an independent contractor. The lot, building, machineries and all other working tools utilized by private respondents in carrying out their tasks were owned and provided by SMC. In addition, the shrimp processing company was found to have control of the manner and method on how the work was done. Thus, the complainants were deemed Ees not of the cooperative but of the shrimp processing company. Since respondents who were engaged in shrimp processing performed tasks usually necessary or desirable in the aquaculture business of SMC, they should be deemed regular Ees of the latter and as such are entitled to all the benefits and rights appurtenant to regular employment. (SMC vs. Prospero Aballa, et al., G.R. No. 149011, June 28, 2005, J. Carpio‐Morales) Q: What are the conditions before permitting job contracting? A: 1.

2.

The labor contractor must be duly licensed by the appropriate Regional Office of the DOLE There should be a written contract between the labor contractor and his client‐Er that will assure the Ees at least the minimum labor standards and benefits provided by existing laws.

Note: The Ees of the contractor or subcontractor shall be paid in accordance with the provisions of the LC. (Art. 106)

Q: What is labor‐only contracting? A: It refers to an arrangement where the following conditions concur: 1.

2.

3.

The person supplying workers to an Er does not have substantial capital or investment in the form of tools, equipment, machineries, work, premises, among others, or Even if such person has substantial assets, the same are not actually or directly used by the Ees contracted out; The workers recruited and placed by such person are performing activities which are directly related to the principal business of such Er.

Q: Why is labor only contracting prohibited?

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A: It gives rise to confusion as to who is the real Er of the workers and who is liable to their claims. It also deprives workers of the opportunity to become regular Ees. Q: How do we determine if one is engaged in labor/job only contracting? A: The test to determine whether one is a job/labor only contracting is to look into the elements of a job contractor. If all the elements of a job contractor are present, then he is a job contractor. Absent one of the elements for a job contractor, then the person is a labor‐only contractor. Note: It is the opinion of Dean Antonio H. Abad, Jr. that the decisive determinant in job contracting should not be the fact that the contracted workers are “performing activities which are directly related to the main business of the principal,” but that the principal has no right to control the conduct of the employees as to the means employed to achieve an end; not the character of the activities as being “usually necessary or desirable in the usual business of the employer.” It cannot be gainsaid that the activities of the contracted workers are always necessary or desirable; even that they are directly related to the main business of the principal. The primordial consideration should be the “control test.” Hence, if the arrangement passes the control test, it is “job‐ contracting.” If it fails, it is “labor‐only contracting.”

Q: Distinguish between job contracting and labor only contracting A: JOB CONTRACTING Liability is limited (shall be solidarily liable with Er only when the Er fails to comply with req’ts as to unpaid wages and other labor standards violations) Permissible, subject only to certain conditions The contractor has substantial capital or investment

LABOR‐ONLY CONTRACTING Liability extends to all those provided under the Labor Standards law

Prohibited by Law Has no substantial capital or investment

Q: SMPC entered into a contract with Arnold for the milling of lumber as well as the hauling of waste wood products. The company provided the equipment and tools because Arnold had neither tools and equipment nor capital for the job. Arnold, on the other hand, hired his friends, relatives and neighbors for the job. Their wages were paid by SMPC to Arnold, based on their


TERMINATION OF EMPLOYMENT production or the number of workers and the time used in certain areas of work. All work activities and schedules were fixed by the company. 1. Is Arnold a job contractor? Explain briefly 2. Who is liable for the claims of the workers hired by Arnold? Explain briefly. A: 1.

2.

No. In the problem given, Arnold did not have sufficient capital or investment for one. For another, Arnold was not free from the control and direction of SMPC because all work activities and schedules were fixed by the company. Therefore, Arnold is not a job contractor. He is engaged in labor‐only contracting. SMPC is liable for the claims of the workers hired by Arnold. A finding that Arnold is a labor only contractor is equivalent to declaring that there exist an Er‐Ee relationship between SMPC and workers hired by Arnold. This is so because Arnold is considered a mere agent of SMPC (Lim v. NLRC, G.R. No. 124630, Feb. 19, 1999); 2002 Bar Question)

Q: What are the grounds for delisting of contractors or subcontractors? A: 1. Non‐submission of contracts between the principal and the contractor or subcontractor when required to do so; 2. Non‐submission of annual report; 3. Findings through arbitration that the contractor or subcontractor has engaged in labor‐only contracting and other prohibited activities; 4. Non‐compliance with labor standards and working conditions. (Sec. 16, D.O. 18‐02) Q: What are the effects of finding that there is labor‐only contracting? A: A finding that a contractor is a “labor‐only” contractor is equivalent to declaring that there is an employer‐employee relationship between the principal and the employees of the “labor‐only” contractor. (Assoc. Anglo‐American Tobacco Corp. v. Clave, G.R. No. 50915, Aug. 30, 1990) 2.TERMINATION OF EMPLOYMENT a.Substantive due process Q: What is Substantive due process?

A: Substantive Due Process provides the ground for disciplinary action, i.e. corrective or retributive (a)Just causes Q: What are the just causes for termination (Art. 282, LC)? A: 1. Serious misconduct or willful disobedience by the employee (Ee) of the lawful orders of his employer (Er) or representative in connection with his work 2. Gross and habitual neglect by the Ee of his duties 3. Fraud or willful breach by the Ee of the trust reposed in him by his Er or duly organized representative 4. Commission of a crime or offense by the Ee against the person of his Er or any immediate member of his family or his duly authorized representative. 5. Other causes analogous to the foregoing Note: The burden of proving that the termination was for a valid or authorized cause shall rest on the Er. (Art. 277[b])

1.Serious Misconduct Q: What is serious misconduct? A: It is an improper or wrong conduct; the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment. To be serious within the meaning and intendment of the law, the misconduct must be of such grave and aggravated character and not merely trivial or unimportant. (Villamor Golf Club v. Pehid, G.R. No. 166152, Oct. 4, 2005) Q: What are the elements of serious misconduct? A: 1. 2. 3.

It must be serious or of such a grave and aggravated character; Must relate to the performance of the employees (Ee) duties; Ee has become unfit to continue working for the employer. (Philippine Aeolus Automotive United Corp. v. NLRC, G.R. No. 124617, April 28, 2000)

Q: Give some examples of serious misconduct. A:

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UST GOLDEN NOTES 2011 1. 2. 3. 4. 5.

Sexual harassment Fighting within the company premises Uttering obscene, insulting or offensive words against a superior Falsification of time records Gross immorality

Q: Escando, upset at his transfer to the washer section, repeatedly uttered “gago ka” and threatened bodily harm to his superior Mr. Andres. Is the utterance of the obscene words and threats of bodily harm gross and willful misconduct? A: Yes. The repeated utterances by Escando of obscene, insulting or offensive words against a superior were not only destructive of the morals of his co‐employees (Ees) and a violation of the company rules and regulations, but also constitute gross misconduct which is one of the grounds provided by law to terminate the services of an Ee. (Autobus Workers Union v. NLRC, G.R. No. 11753, June 26, 1998) Q: Samson made insulting and obscene utterances towards the General Manager saying “Si EDT bullshit yan, sabihin mo kay EDT yan” among others during the Christmas party. Are the utterances towards the General Manager gross misconduct? A: The alleged misconduct of Samson when viewed in its context is not of such serious and grave character as to warrant his dismissal. Samson made the utterances and obscene gestures at an informal Christmas gathering and it is to be expected during this kind of gatherings, where tongues are more often than not loosened by liquor of other alcoholic beverages, that employees (Ees) freely express their grievances and gripes against their employers (Ers). Ees should be allowed wider latitude to freely express heir grievances and gripes against their Er. Ees should be allowed wider latitude to freely express their sentiments during these kinds of occasions which are beyond the disciplinary authority of the Er. (Samson v. NLRC, G.R. No. 121035, April 12, 2000) 2.Willful Disobedience Q: When is willful disobedience of the Er’s lawful orders a just cause for termination? A: 2 requisites must concur: 1.

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The employees (Ees) assailed conduct must have been willful or intentional, the willfulness being characterized by a wrongful and perverse attitude.

2.

The disobeyed orders, regulations or instructions of the Er must be: a. Reasonable and lawful b. Sufficiently made known to the Ee c. Must pertain to or be in connection with the duties which the Ee has been engaged to discharge. (Cosep V. NLRC, G.R. No. 124966 June 16, 1998)

Note: There is no law that compels an Ee to accept a promotion for the reason that a promotion is in the nature of a gift or reward, which a person has the right to refuse. The exercise of the Ee of the right to refuse a promotion cannot be considered in law as insubordination or willful disobedience. (PT&T Corp. v. CA, G.R. No. 152057, Sep. 29, 2003)

Q: The company vehicle was brought out of the company premises without authorization twice. In the first instance the company opted not to implement any action against Dioks and instead issued a memorandum reiminding Dioks as well as the security guards of the proper procedure. However, in the second instance the vehicle met an accident. Is Dioks guilty of willful disobedience even though he was not the one who personally brought the company vehicle out of the company premises and was merely a passenger in the second incident? A: Yes. A rule prohibiting Ees from using company vehicles for private purpose without authority from management is a reasonable one. When Dioks rode the company vehicle he was undoubtedly aware of the possible consequences of his act and taking into consideration his moral ascendancy over the security guards it was incumbent upon him not only to admonish them but also to refrain from using the company car himself. (Family Planning Org. of the Phil. v. NLRC, G.R. No. 75907, Mar. 23, 1992) Q: Escobin’s group were security guards based in Basilan. They were placed in floating status and were asked to report for reassignment in Metro Manila by PISI. Upon failure to report or respond to such directives they were ordered dismissed from employment by PISI for willful disobedience. Did the failure to report to Manila amount to willful disobedience? A: The reasonableness of the rule pertains to the kind of character of directives and commands and to the manner in which they are made. In this case, the order to report to the Manila office fails to meet this standard. The order to report to Manila was inconvenient, unreasonable, and prejudicial to Escobin’s group since they are heads of families residing in Basilan and they were not given


TERMINATION OF EMPLOYMENT transportation money or assurance of availability of work in Manila. (Escobin v. NLRC, G.R. No. 118159. April 15, 1998) 3.Negligence Q: When is negligence a just cause for termination? A: When it is gross and habitual. Q: When is there Gross Negligence? A: Gross negligence implies a want or absence of or failure to exercise slight care of diligence of the entire absence of care it evinces thoughtless disregard of consequences without exerting any effort to avoid them. However, such neglect must not only be gross but habitual in character. (Judy Phils. v. NLRC, G.R. No. 111934, April 29, 1998) Q: When is there Habitual Neglect of duties? A: Habitual Neglect implies repeated failure to perform one’s duties over a period of time, depending upon the circumstance. (JGB and Associates v. NLRC, GR No. 10939, Mar. 7, 1996) Q: Antiola, as assorter of baby infant dress as for Judy Phils. erroneously assorted and packaged 2,680 dozens of infant wear. Antiola was dismissed from employment for this infraction. Does the single act of misassortment constitute gross negligence?

A: Yes, failure to observe prescribed standards of work, or to fulfill reasonable work assignments due to inefficiency may constitute just cause for dismissal. Such inefficiency is understood to mean failure to attain work goals or work quotas, either by failing to complete the same within the allotted reasonable period, or by producing unsatisfactory results. (Buiser v. Leogardo, G.R. No. L‐63316, July 31, 1984) This ground is considered analogous to those enumerated under Art. 282. (Skippers United Pacific v. Magud, G.R. No. 166363, Aug. 15, 2006) Q: Gamido was a quality control inspector of VH Manufacturing. Gamido was allegedly caught by the company Pres. Dy Juanco of sleeping and was dismissed from employment. Did Gamido’s act of sleeping on the job constitute a valid cause of dismissal? A: Sleeping on the job as a valid ground for dismissal only applies to security guards whose duty necessitates that they be awake and watchful at all times. Gambido’s single act of sleeping further shows that the alleged negligence or neglect of duty was neither gross nor habitual. (VH Manufacturing v. NLRC, G.R. No. 130957, Jan. 19, 2000) Q: Give some forms of neglect of duty. A: 1. 2.

A: No. Such neglect must not only be gross but also habitual in character. Hence, the penalty of dismissal is quite severe considering that Antiola committed the infraction for the first time. (Judy Phils. v. NLRC, G.R. No. 111934. April 29, 1998) Q: Does the failure in performance evaluations amount to gross and habitual neglect of duties? A: As a general concept “poor performance” is equivalent to inefficiency and incompetence in the performance of official duties. The fact that an employee’s (Ee’s) performance is found to be poor or unsatisfactory does not necessarily mean that the Ee is grossly and habitually negligent of his duties. Gross negligence implies a want or absence of or failure to exercise slight care of diligence or the entire absence or care. He evinces a thoughtless disregard of consequences without exerting any effort to avoid them. (Eastern Overseas Employment Center Inc. v. Bea, G.R. 143023, Nov.29, 2005) Q: Is inefficiency a just cause for dismissal?

Habitual tardiness and absenteeism Abandonment: a. Failure to report for work or absence without justifiable reason b. Clear intention to sever Er‐Ee relationship manifested by some overt acts. (Labor et. al v. NLRC, GR No. 110388, Sep.14, 1995)

4.Abandonment Q: What is abandonment as a just cause for termination? A: It means the deliberate, unjustified refusal of an employee to resume his employment. Q: What are the requirements for a valid finding of abandonment? A: For a valid finding of abandonment, 2 factors must be present: 1. The failure to report for work, or absence without valid or justifiable reason; and 2. A clear intention to sever Er‐Ee relationship, with the 2nd element as the

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UST GOLDEN NOTES 2011 more determinative factor, being manifested by some overt acts. (Sta. Catalina College s. NLRC, G.R. No. 144483, Nov. 19, 2003) Q: How to prove abandonment? A: To prove abandonment, the Er must show that the Ee deliberately and unjustifiably refused to resume his employment without any intention of returning. There must be a concurrence of the intention to abandon and some overt acts from which an Ee may be deduced as having no more intention to work. The law, however, does not enumerate what specific overt acts can be considered as strong evidence of the intention to sever the Ee‐Er relationship. (Sta. Catalina College v. NLRC, G.R. No. 144483. Nov. 19, 2003) Q: Mejila a barber at Windfield Barber Shop, had an altercation with a fellow barber which resulted in his subsequent turning over the duplicate keys of the shop to the cashier and took away all his belongings there from and worked at different barbershop. Mejila then filed an illegal dismissal case but did not seek reinstatement as a relief. Did Mejila commit abandonment? A: Mejila’s acts such as surrendering the shop’s keys, not reporting to the shop anymore without any justifiable reason, his employment in another barber shop, and the filing of a complaint for illegal dismissal without praying for reinstatement clearly show that there was a concurrence of the intention to abandon and some overt acts from which it may be inferred that the Ee concerned has no more interest in working. (Jo v. NLRC, G.R. No. 121605, Feb. 2, 2000) 5.Fraud; Breach of Trust / Loss of Confidence Q: When is breach of trust/loss of confidence a just cause for termination? A: 1.

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It applies only to cases involving: a. Employees (Ees) occupying positions of trust and confidence (confidential and managerial Ee’s) – to this class belong managerial Ees, i.e., those vested with the powers or prerogatives to lay down management policies and/or to hire, transfer, suspend, lay‐off, recall, discharge, assign or discipline Ees or effectively recommend such managerial actions b. Ees routinely charged with the care and custody of the employer’s (Er’s)

2.

money or property – to this class belong cashiers, auditors, property custodians, etc., or those who, in the normal and routine exercise of their functions, regularly handle significant amounts of money or property. (Mabeza v. NLRC, G.R. No. 118506 April 18, 1997) The loss of trust and confidence must be based on willful breach. Note: A breach is willful if it is done intentionally, knowingly, and purposely without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly, or inadvertently (De la Cruz v. NLRC, G.R. No. 119536, Feb. 17, 1997)

3.

The act constituting the breach must be “work‐related” such as would show the Ee concerned to be unfit to continue working for the Er. (Gonzales V. NLRC, G.R. No. 131653, Mar. 26, 2001)

4.

It must be substantial and founded on clearly established facts sufficient to warrant the Ee’s separation from employment. (Sulpicio Lines Inc. V. Gulde, G.R. No. 149930, Feb. 22, 2002)

5.

Fraud must be committed against the Er or his representatives, e.g.: a. Falsification of time cards b. Theft of company property c. Unauthorized use of company vehicle

Note: The treatment of rank and file personnel and managerial Ees in so far as the application of the doctrine of loss of trust and confidence is concerned is different. As regards managerial Ees, such as Caoile, mere existence of a basis for believing that such Ee has breached the trust of his Er would suffice for his dismissal. (Caoile v. NLRC, G.R. No. 115491, Nov. 24, 1998)

Q: What are the guidelines for the doctrine of loss of confidence to apply? A: 1.

2.

3.

Loss of confidence should not be simulated (reasonable basis for loss of trust and confidence) Not used for subterfuge for causes which are improper and/or illegal and unjustified Not arbitrarily asserted in the face of overwhelming evidence to the contrary



5.

Must be genuine, not a mere afterthought to justify earlier action taken in bad faith and The Ee involved holds a position of trust and confidence

Note: The breach of trust must rest on substantial grounds and not on the Er’s arbitrariness, whims, caprices, or suspicion; otherwise, the Ee would eternally remain at the mercy of the Er. It should be genuine and not simulated, nor should it appear as a mere afterthought to justify earlier action taken in bad faith of a subterfuge for causes which are improper, illegal, or unjustified. It has never been intended to afford and occasion for abuse because of its subjective nature. There must, therefore, be an actual breach of dully committed by the employee which must be established by substantial evidence. (Dela Cruz v. NLRC, G.R. No. 119536, Feb. 17, 1997)

Q: Mabeza a chambermaid at Hotel Supreme was terminated from employment because of her refusal to sign an affidavit attesting to their employer’s (Er’s) compliance with minimum wage and other labor standards. Mabeza filed a complaint for illegal dismissal against Hotel Supreme. As a defense, Hotel Supreme claimed that she abandoned her work and belatedly claimed loss of confidence as the ground for the dismissal of Mabeza because she stole some of the properties of her Er. Is loss of confidence a valid ground for dismissal of a hotel chambermaid? A: No. Loss of confidence as a just cause for dismissal was never intended to provide Ers with a blank check for terminating their Ees. Evidently, an ordinary chambermaid who has to sign out for linen and other hotel property from the property custodian each day and who has to account for each and every towel or bed sheet utilized by the hotel's guests at the end of her shift would not fall under any of these two classes of Ees for which loss of confidence, if ably supported by evidence, would normally apply. (Mabeza v. NLRC, G.R. No. 118506, April 18, 1997) Q: Abelardo Abel was first hired by Philex Mining Corp. in Jan. ’88. He was later assigned to the company’s Legal Dep’t as a Contract Claims Asst., and held the position for 5 yrs prior to his transfer to the Mine Eng’g and Draw Control Dep’t wherein he was appointed Unit Head. In ‘02, he was implicated in an irregularity occurring in the subsidence area of the company’s mine site at Benguet. His co‐worker Danilo, executed an affidavit known as the “Subsidence Area Anomaly”. The incidents in Lupega’s affidavit supposedly took place when Abel was still a Contract Claims Asst. at the company’s legal dep’t.

An investigation was promptly launched by the company’s officers. Abel attended the meetings but claimed that he was neither asked if he needed the assistance of counsel nor allowed to properly present his side. By memo, the company found Abel guilty of (1) fraud resulting in loss of trust and confidence and (2) gross neglect of duty, and was meted out the penalty of dismissal from employment. Was Abel validly dismissed for any of the causes provided for in Art. 282 of the LC? A: No. The 1st requisite for dismissal on the ground of loss of trust and confidence is that the Ee concerned must be holding a position of trust and confidence. Abel was a contract claims assistant at the time he allegedly committed the acts which led to its loss of trust and confidence. It is not the job title but the actual work that the Ee performs. It was part of Abel’s responsibilities to monitor the performance of the company’s contractors in relation to the scope of work contracted out to them. The 2nd requisite is that there must be an act that would justify the loss of trust and confidence. Loss of trust and confidence, to be a valid cause for dismissal, must be based on a willful breach of trust and founded on clearly established facts. The basis for the dismissal must be clearly and convincingly established but proof beyond reasonable doubt is not necessary. The company’s evidence against Abel fails to meet this standard. Its lone witness, Lupega, did not support his affidavit and testimony during the company investigation with any piece of evidence at all. It could hardly be considered substantial evidence. (Abel v. Philex Mining Corp., G.R. No. 178976, July 31, 2009, J. Carpio‐Morales) 6.Termination of Employment pursuant to Union Security Clause Q: MSMG was a local union affiliated with ULGWP a national federation. MSMG had a dispute with ULGWP over an imposition of a fine prompting MSMG to declare independence from ULGWP. Because of the dispute, ULGWP asked for the dismissal from employment of the officers of MDMG from the company by virtue of a union security clause in the CBA. The company dismissed the officers. Does a union security clause absolve the company form observing the requirement of due process? A: Although union security clauses embodied in the CBA may be validly enforced and dismissals pursuant thereto may likewise be valid, this does not erase the fundamental requirement of due process. An employer cannot merely rely upon a labor federation’s allegations in terminating union

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UST GOLDEN NOTES 2011 officers expelled by the federation for allegedly committing acts of disloyalty and/or inimical to the interest of the federation and in violation of its constitution and by laws. The right of an Ee to be informed of the charges against him and to be given a reasonable opportunity to present his side in a controversy with either the company or his own union is not wiped away by a union security clause in a CBA. Even assuming that a federation had valid grounds to expel union officers, due process requires that these union officers be accorded a separate hearing by the company. (MSMG v. Ramos, G.R. No. 113907, Feb. 28, 2000)

9.Analogous Cases Q: What is required for an act to be included in analogous cases of just causes of termination? A: Must be due to the voluntary and/or willful act or omission of the employee (Nadura v. Benguet Consolidated, G.R. No. L‐17780, Aug. 24, 1962), e.g.: 1. 2. 3. 4. 5.

7.Totality of Infractions doctrine Q: What is the totality of infractions doctrine? A: It is the totality, not the compartmentalization of company infractions that the Ee has committed, which justifies the penalty of dismissal. (MERALCO v. NLRC, G.R. No. 114129, Oct. 24, 1996) Note: Where the Ee has been found to have repeatedly incurred several suspensions or warnings on account of violations of company rules and regulations, the law warrants their dismissal as it is akin to “habitual delinquency”. (Villeno v. NLRC, G.R. No. 108153, Dec. 26, 1995)

Q: What are the guidelines to determine the validity of termination?

6.

Q: What is the doctrine of incompatibility? A: Where the employee has done something that is contrary or incompatible with the faithful performance of his duties, his employer has a just cause for terminating his employment. (Manila Chauffeur’s League v. Bachrach Motor Co., G.R. No. L‐47071, June 17, 1940 ) (b).Authorized Causes Q: What are the authorized causes of termination by the employer (Er)? A: 1.

A: Gravity of the offense 1. Position occupied by the employee 2. Degree of damage to the employer 3. Previous infractions of the same offense 4. Length of Service 8.Commission of a Crime Q: What do you mean by “commission of a crime or offense” as a just cause for termination of an Ee? A: It refers to an offense by the Ee against the person of his employer or any immediate member of his family or his duly authorized representative and thus, conviction of a crime involving moral turpitude is not analogous thereto as the element of relation to his work or to his employer is lacking. Note: A criminal case need not be actually filed. Commission of acts constituting a crime itself is sufficient.

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Violation of company rules and regulations Drunkenness Gross inefficiency Illegally diverting employer’s products Failure to heed an order not to join an illegal picket Violation of safety rules and code of discipline

2.

Installation of labor‐saving devices (automation/robotics) Redundancy (superfluity in the performance of a particular work) – exists where the services of an employee (Ee) are in excess of what is reasonably demanded by the actual req’ts of the enterprise. (Wiltshire File Co., Inc. v. NLRC, G.R. No. 82249, Feb. 7, 1991)

Note: The redundancy should not have been created by the Er.

3.

Reorganization Note: An Er is not precluded from adopting a new policy conducive to a more economical and effective management, and the law does not require that the Er should be suffering financial losses before he can terminate the services of the employee on the ground of redundancy (DOLE Phil., Inc. v. NLRC, G.R. No. L‐55413, July 25, 1983)



Retrenchment – cutting of expenses and includes the reduction of personnel; It is a management prerogative, a means to protect and preserve the Er’s viability and ensure his survival. To be an authorized cause it must be affected in good faith (GF) and for the retrenchment, which is after all a drastic recourse with serious consequences for the livelihood of the Ee’s or otherwise laid‐off. Note: The phrase “to prevent losses” means that retrenchment or termination from the service of some Ees is authorized to be undertaken by the Er sometime before the anticipated losses are actually sustained or realized. Evidently, actual losses need not set in prior to retrenchment. (Cajucom VII v. TP Phils Cement Corp., et al, G.R. No. 149090, Feb. 11, 2005)

5.

6.

Closing or cessation of operation of the establishment or undertaking – must be done in good faith and not for the purpose of circumventing pertinent labor laws. Disease – must be incurable within 6 months and the continued employment is prohibited by law or prejudicial to his health as well as to the health of his co‐ Ees with a certification from the public health officer that the disease is incurable within 6 months despite due to medication and treatment

Q: What are other authorized causes? A: 1. Total and permanent disability of Ee 2. Valid application of union security clause 3. Expiration of period in term of employment 4. Completion of project in project employment 5. Failure in probation 6. Relocation of business to a distant place 7. Defiance of return‐to work‐order 8. Commission of Illegal acts in strike 9. Violation of contractual agreement 10. Retirement Q: What are the procedural steps required in termination of an employee for authorized causes? A: 1. Written Notice to DOLE 30 days prior to the intended day of termination.

2.

3.

Purpose: To enable it to ascertain the verity of the cause of termination. Written notice to Ee concerned 30 days prior the intended date of termination. Payment of separation pay ‐ Serious business losses do not excuse the Er from complying with the clearance or report required in Art. 283 of the LC and its IRR before terminating the employment of its workers. In the absence of justifying circumstances, the failure of the Er to observe the procedural req’ts under Art. 284 taints their actuations with bad faith if the lay‐off was temporary but then serious business losses prevented the reinstatement of respondents, the Er’s should have complied with the req’ts of written notice.

Redundancy Q: What are the requisites of a valid redundancy? A: 1. Written notice served on both the employees (Ees) and the DOLE at least 1 month prior to separation from work 2. Payment of separation pay equivalent to at least 1 month pay or at least 1 month pay for every year of service, whichever is higher 3. Good faith in abolishing redundant position 4. Fair and reasonable criteria in ascertaining what positions are to be declared redundant: a. Less preferred status, e.g. temporary Ee b. Efficiency and c. Seniority Q: Ong, a Sales Manager of Wiltshire File Co., Inc., was informed of the termination of his employment due to redundancy upon returning from a trip abroad. Ong maintains that there can be no redundancy since he was the only person occupying his position in the company. Is there redundancy even though Ong was the only one occupying his position. A: Redundancy in an employer’s (Er’s) personnel does not necessarily or even ordinarily refer to duplication of work. The characterization ofOng’s services as no longer necessary or sustainable and therefore properly terminable, was an exercise of business judgment on the part of Wiltshire.

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UST GOLDEN NOTES 2011 Furthermore, a position is redundant where it is superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as over hiring of workers, decreased volume of business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. The Er has no legal obligation to keep in its payroll more employees that are necessary for the operation of its business. (Wiltshire File Co., Inc. v. NLRC, G.R. No. 82249, Feb. 7, 1991) Retrenchment Q: What are the circumstances that must be present for a valid retrenchment? A: 1.

2.

The losses expected should be substantial and not merely de minimis in extent ‐ If the loss purportedly sought to be forestalled by retrenchment is clearly shown to be insubstantial and inconsequential in character, the bona fide nature of the retrenchment would appear to be seriously in question. The substantial loss apprehended must be reasonably imminent ‐ as such imminence can be perceived objectively and in good faith by the employer (Er). There should be a certain degree of urgency for the retrenchment.

3.

It must be reasonably necessary and likely to prevent the expected losse ‐ The Er should have taken other measures prior or parallel to retrenchment to forestall losses such as cutting other costs than labor costs.

4.

The alleged losses if already realized, and the expected imminent losses sought to be forestalled, must be proved by sufficient and convincing evidence ‐ The reason for requiring this quantum of proof is readily apparent: any less exacting standard of proof would render too easy the abuse of this ground for termination of services of employees. (Lopez Sugar Corp. v. Federation of Free Workers, G.R. No. 75700‐01, Aug. 30, 1990)

Note: The losses which the company may suffer or is suffering may be proved by financial statements audited by independent auditors (Asian Alcohol Corporation v. NLRC, G.R. No. 131108, Mar. 25, 1999)

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Retrenchment is a means of last resort.

Q: What are the requisites of a valid retrenchment? A: 1. Written notice served on both the Ee and the DOLE at least 1 month prior to the intended date of retrenchment 2. Payment of separation pay equivalent to at least one month pay or at least 1/2 month pay for every year of service, whichever is higher 3. Good faith 4. Proof of expected or actual losses 5. The employer used fair and reasonable criteria in ascertaining who would be retained among the Ees, such as status, efficiency, seniority, physical fitness, age, and financial hardship of certain workers (Asian Alcohol Corp. v. NLRC, G.R. No. 131108, Mar. 25, 1999). Q: What are the criteria in selecting employees (Ees) to be retrenched? A: There must be fair and reasonable criteria to be used in selecting Ees to be dismissed such as: 1. Less preferred status; 2. Efficiency rating; 3. Seniority. (Phil. Tuberculosis Society, Inc. v. National Labor Union, G.R. No. 115414, Aug. 25, 1998) Q: What is the “last in first out (LIFO)” rule? A: It applies in the termination of employment in the line of work. What is contemplated in the LIFO rule is that when there are two or more Ees occupying the same position in the company affected by the retrenchment program, the last one employed will necessarily be the first one to go. (Maya Farms Ees’ Organization v. NLRC, G.R. No. 106256, Dec. 28, 1994) Q: Is the seniority rule or "last in first out" policy to be strictly followed in effecting a retrenchment or redundancy program? A: Again, in Asian Alcohol Corp., the SC stated that with regard the policy of "first in, last out" in choosing which positions to declare as redundant or whom to retrench to prevent further business losses, there is no law that mandates such a policy. The reason is simple enough. A host of relevant factors come into play in determining cost efficient measures and in choosing the Ees who will be retained or separated to save the


TERMINATION OF EMPLOYMENT company from closing shop. In determining these issues, management plays a pre‐eminent role. The characterization of positions as redundant is an exercise of business judgment on the part of the Er. It will be upheld as long as it passes the test of arbitrariness. (2001 Bar Question) Q: What is the difference between redundancy and retrenchment? A: In redundancy, company has no financial problems, unlike in retrenchment where the company will suffer financial losses. Q: Philippine Tuberculosis Society, Inc. retrenched 116 Ees after incurring deficits amounting to 9.1 million pesos. Aside for retrenching some of its Ees, the company also implemented cost cutting measures to prevent such losses for increasing and minimizing it. The NLRC ruled that the retrenchment was not valid on the ground that the Society did not take seniority into account in their selection. Was the retrenchment done by the Society not valid for its failure to follow the criteria laid down by law? A: No. The Society terminated the employment of several workers who have worked with the Society for great number of years without consideration for the number of years of service and their seniority indicates that they had been retained for such a long time because of loyal and efficient service. The burden of proving the contrary rest on the Society. (Phil. Tuberculosis Society, Inc. v. National Labor Union, G.R. No. 115414, Aug. 25, 1998) Q: Due to mounting losses the former owners of Asian Alcohol Corporation sold its stake in the company to Prior Holdings. Upon taking control of the company and to prevent losses, Prior Holdings implemented a reorganization plan and other cost‐ saving measures and one of them is the retrenchment of 117 employees (Ees) of which some are members of the union and the majority held by non‐union members. Some retrenched workers filed a complaint for illegal dismissal alleging that the retrenchment was a subterfuge for union busting activities. Was the retrenchment made by Asian Alcohol valid and justified? A: Yes. Even though the bulk of the losses were suffered under the old management and continued only under the new management ultimately the new management of Prior Holdings will absorb such losses. The law gives the new management every right to undertake measures to save the company

from bankruptcy. (Asian Alcohol Corp. v. NLRC, G.R. No. 131108, Mar. 25, 1999) Closure Q: What are the requisites of a valid closure? A: 1.

2.

3. 4. 5.

Written notice served on both the employees (Ees) and the DOLE at least 1 month prior to the intended date of closure Payment of separation pay equivalent to at least one month pay or at least 1/2 month pay for every year of service, whichever is higher, except when closure is due to serious business losses Good faith No circumvention of the law No other option available to the Er

Q: What is the test for the validity of closure or cessation of establishment or undertaking? A: The ultimate test of the validity of closure or cessation of establishment or undertaking is that it must be bona fide in character. And the burden of proving such falls upon the Er. (Capitol Medical Center, Inc. vs. Dr. Meris, G.R. No. 155098, Sep. 16, 2005, J. Carpio‐Morales) Q: When is separation pay required in case of closure? A: Only where closure is not due to serious business losses nor due to an act of gov’t. (North Davao Mining Corp v. NLRC, G.R. No. 112546, Mar. 13, 1996; NFL v. NLRC, G.R. No. 127718, Mar. 2, 2000) Q: Galaxie Steel Corp. decided to close down because of serious business loses. It filed a written notice with the DOLE informing its intended closure and the termination of its employees (Ees). It posted the notice of closure on the corporate bulletin board. Q: Does the written notice posted by Galaxie on the bulletin board sufficiently comply with the notice req’t under Art. 283 of the LC? A: No. In order to meet the purpose, service of the written notice must be made individually upon each and every Ee of the company. However, the Court held that where the dismissal is for an authorized cause, non‐compliance with statutory due process should not nullify the dismissal, or render it illegal, or ineffectual. Still, the employer should indemnify the Ee, in the form of nominal damages, for the violation of his right to statutory due process.

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UST GOLDEN NOTES 2011 (Galaxie Steel Workers Union v. NLRC, G.R. No. 165757, Oct. 17, 2006) Are Ees entitled to separation pay? A: No. Galaxie had been experiencing serious financial losses at the time it closed business operations. Art. 283 of the LC governs the grant of separation benefits "in case of closures or cessation of operation" of business establishments "not due to serious business losses or financial reverses." Where, the closure then is due to serious business losses, the LC does not impose any obligation upon the employer to pay separation benefits. (Galaxie Steel Workers Unin v. NLRC, G.R. No. 165757, Oct. 17, 2006) Q: Rank‐and‐file workers of SIMEX filed a petition for direct certification and affiliated with Union of Filipino Workers (UFW). Subsequently, 36 workers of the company’s “lumpia” dep’t and 16 other workers from other dep’ts were effectively locked out when their working areas were cleaned out. The workers through UFW filed a complaint for unfair labor practices against the company. SIMEX then filed a notice of permanent shutdown/total closure of all units of operation in the establishment with the DOLE allegedly due to business reverses brought about by the enormous rejection of their products for export to the United States. Was the closure warranted by the alleged business reverses? A: The closure of a business establishment is a ground for the termination of the services of any employee unless the closing is for the purpose of circumventing the provisions of the law. But, while business reverses can be a just cause for terminating employees, they must be sufficiently proved. In this case, the audited financial statement of SIMEX clearly indicates that they actually derived earnings. Although the rejections may have reduced their earnings they were not suffering losses. There is no question that an employer may reduce its work force to prevent losses but it must be serious, actual and real otherwise this ground for termination would be susceptible to abuse by scheming employers who might be merely feigning business losses or reverses in their business ventures to ease out employees. (Union of Filipino Workers v. NLRC, G.R. No. 90519, Mar. 23, 1992) Q: Carmelcraft Corporation closed it business operations allegedly due to losses of P1, 603.88 after the Carmelcraft Ees Union filed a petition for certification election. Carmelcraft Union filed a complaint for illegal lockout and ULP with

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damages and claim for employment benefits. Were the losses incurred by the company enough to justify closure of its operations? A: The determination to cease operations is a prerogative of management that is usually not interfered with by the State as no business can be required to continue operating at a loss simply to maintain the workers in employment. That would be a taking of property without due process of law which the employer has a right to resist. But where it is manifest that the closure is motivated not by a desire to avoid further losses but to discourage the workers from organizing themselves into a union for more effective negotiations with management, the State is bound to intervene. The losses of less than P2,000 for a corporation capitalized at P3 million cannot be considered serious enough to call for the closure of the company. (Carmelcraft Corp. v. NLRC, G.R. No. 90634‐35, June 6, 1990) Q: Is the transferee of the closed corporation required to absorb the employees (Ees) of the old corporation? A: GR: There is no law requiring a bona fide purchaser of assets of an on‐going concern to absorb in its employ the Ee’s of the latter except when the transaction between the parties is colored or clothed with bad faith (BF). (Sundowner Dev’t Corp. v. Drilon, G.R. No. 82341, Dec. 6, 1989) XPNs: 1. Where the transferee was found to be merely an alter ego of the different merging firms. (Filipinas Port Services, Inc. v. NLRC, G.R. No. 97237, Aug. 16, 1991) 2. Where the transferee voluntarily agrees to do so. (Marina Port Services, Inc. v. Iniego, G.R. No. 77853, Jan. 22, 1990) Q: Marikina Dairy Industries, Inc. decided to sell its assets and close operations on the ground of heavy losses. The unions alleged that the financial losses were imaginary and the dissolution was a scheme maliciously designed to evade its legal and social obligations to its employees (Ees). The unions want the buyers of the corporations assets restrained to operate unless the members of the unions were the ones hired to operate the plant under the terms and conditions specified in the collective bargaining agreements. Is the buyer of a company’s assets required to absorb the Ees of the seller? A: There is no law requiring that the purchaser of a company’s assets should absorb its Ees and the


TERMINATION OF EMPLOYMENT most that can be done for reasons of public policy and social justice was to direct that buyers of such assets to give preference to the qualified separated Ees in the filling up of vacancies in the facilities of the buyer. (MDII Supervisors & Confidential Ees Ass’n (FFW) v. residential Assistant on Legal Affairs, G.R. Nos. L‐45421‐23, Sep. 9, 1977) Q: What is the difference between closure and retrenchment? A: CLOSURE Is the reversal of fortune of the Er whereby there is a complete cessation of business operations to prevent further financial drain upon an Er who cannot pay anymore his Ees since business has already stopped.

One of the prerogatives of management is the decision to close the entire establishment or to close or abolish a department or section thereof for economic reasons, such as to minimize expenses and reduce capitalization.

Does not obligate the Er for the payment of separation package if there is closure of business due to serious losses.

RETRENCHMENT Is the reduction of personnel for the purpose of cutting down on costs of operations in terms of salaries and wages resorted to by an Er because of losses in operation of a business occasioned by lack of work and considerable reduction in the volume of business. As in the case of retrenchment, however, for the closure of a business or a department due to serious business losses to be regarded as an authorized cause for terminating Ees, it must be proven that the losses incurred are substantial and actual or reasonably imminent; that the same increased through a period of time; and that the condition of the company is not likely to improve in the near future. LC provides for the payment of separation package in case of retrenchment to prevent losses.

Disease Q: When is disease a ground for dismissal? A: Where the Ee suffers from a disease, and: 1. His continued employment is prohibited by law or prejudicial to his health or to the health of his co‐Ees. (Sec.8, Rule I, Book VI, IRR)

2.

With a certification by competent public health authority that the disease is incurable within 6 months despite due medication and treatment. (Solis v. NLRC, GR No. 116175, Oct. 28,1996)

Note: The req’t for a medical certification cannot be dispensed with; otherwise, it would sanction the unilateral and arbitrary determination by the Er of the gravity or extent of the Ee’s illness and thus defeat the public policy on the protection of labor. (Manly Express v Payong, G.R. No. 167462, Oct.25, 2005) Termination of services for health reasons must be effected only upon compliance with the above requisites. The req’t for a medical certificate under Art. 284 of the LC cannot be dispensed with; otherwise, it would sanction the unilateral and arbitrary determination by the Er of the gravity or extent of the Ee’s illness and thus defeat the public policy on the protection of labor. (Sy et. al v. CA, G.R. No. 142293, Feb. 27, 2003)

Q: What is the procedure in terminating an employee (Ee) on the ground of disease? A: 1. The employer (Er) shall not terminate his employment unless: a. There is a certification by a competent public health authority b. That the disease is of such nature or at such a stage that it cannot be cured within a period of 6 months even with proper medical treatment. 2. If the disease or ailment can be cured within the period, the Er shall not terminate the Ee but shall ask the Ee to take a leave. The Er shall reinstate such Ee to his former position immediately upon the restoration of his normal health. (Sec. 8, Rule I, Book VI, IRR) Q: Is an employee suffering from a disease entitled to reinstatement? A: Yes, provided he presents a certification by a competent public health authority that he is fit to return to work. (Cebu Royal Plant v. Deputy Minister, G.R. No. L‐58639, Aug. 12, 1987) Q: Is the requirements of a medical certificate mandatory? A: Yes, it is only where there is a prior certification from a competent public authority that the disease

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UST GOLDEN NOTES 2011 afflicting the employee sought to be dismissed is of such nature or at such stage that it cannot be cured within 6 months even with proper medical treatment that the latter could be validly terminated from his job. (Tan v. NLRC, G. R. No. 116807, April 14, 1997)

Closures or cessation of operation not due to serious business losses/financial reverses

Equivalent to at least 1 month pay or at least 1 month pay for every year of service (if due to severe financial losses, no separation pay

Note: Termination from work on the sole basis of actual perceived or suspected HIV status is deemed unlawful. (Sec. 35, R.A. 8504 HIV/AIDS Law)

Disease

Equivalent to at least 1 month pay or at least ½ month pay for every year of service, whichever is higher

Q: Anna Ferrer has been working as bookkeeper at Great Foods, Inc., which operates a chain of high‐end restaurants throughout the country, since 1970 when it was still a small eatery at Binondo. In the early part of the year 2003, Anna, who was already 50 years old, reported for work after a week‐long vacation in her province. It was the height of the SARS scare, and management learned that the first confirmed SARS death case in the Phils, a “balikbayan” nurse from Canada, is a townmate of Anna. Immediately, a memorandum was issued by management terminating the services of Anna on the ground that she is a probable carrier of SARS virus and that her continued employment is prejudicial to the health of her co‐Ees. Is the action taken by the employer (Er) justified?

A: The Er’s act of terminating the employment of Anna is not justified. There is no showing that said employee is sick with SARS, or that she associated or had contact with the deceased nurse. They are merely town mates. Furthermore, there is no certification by a competent public health authority that the disease is of such a nature or such a stage that it cannot be cured within a period of 6 months even with proper medical treatment. (Implementing Rules, Book VI, Rule 1, Sec. 8, LC) (2004 Bar Question) Q: Discuss the rules on separation pay with regard to each cause of termination. A: CAUSE OF TERMINATION Automation

Redundancy Retrenchment

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SEPARATION PAY Equivalent to at least 1 month pay or at least 1 month pay for every year of service, whichever is higher Equivalent to at least 1 month pay or at least 1 month pay for every year of service, whichever is higher Equivalent to 1 month pay or at least ½ month pay for every year or service

Note: A fraction of at least 6 months shall be considered 1 whole year. There is no separation pay when the closure is due to an act of the gov’t.

Q: What is the purpose of the 2 notices served to the Ee and DOLE 1 month prior to termination? A: 1. To give the Ees some time to prepare for the eventual loss of their jobs and their corresponding income, look for other employment and ease the impact of the loss of their jobs. 2. To give DOLE the opportunity to ascertain the verity of the alleged cause of termination. (Phil. Telegraph & Telephone Corp. v. NLRC, G.R. No. 147002, April 15, 2005) Note: Notice to both the Ees concerned and the DOLE are mandatory and must be written and given at least 1 month before the intended date of retrenchment – and the fact that the Ees were already on temporary lay‐off at the time notice should have been given to them is not an excuse to forego the 1‐month written notice. (Sebuguero v. NLRC, G.R. No.115394, Sep. 27, 1995)

Q: DAP Corp. ceased its operation due to the termination of its distribution agreement with Int’l Distributors Corp. which resulted in its need to cease its business operations and to terminate the employment of its Ees. Marcial et al. filed a complaint for illegal dismissal and for failure to give the Ees written notices regarding the termination of their employment. On the other hand, DAP claims that their Ees actually knew of the termination therefore the written notices were no longer required. Are written notices dispensed with when the Ees have actual knowledge of the redundancy? A: The Ees’ actual knowledge of the termination of a company’s distributorship agreement with another company is not sufficient to replace the formal and written notice required by law. In the


TERMINATION OF EMPLOYMENT written notice, the Ees are informed of the specific date of the termination, at least a month prior to the date of effectivity, to give them sufficient time to make necessary arrangements. In this case, notwithstanding the Ees knowledge of the cancellation of the distributorship agreement, they remained uncertain about the status of their employment when DAP failed to formally inform them about the redundancy. (DAP Corp. v. CA, G.R. No. 165811, Dec. 14, 2005)

1.

2.

b.Procedural due process

Note: Failure to comply with the req’t of the 2 notices makes the dismissal illegal. The procedure is mandatory. (Loadstar Shipping Co. Inc. v. Mesano, G.R. No. 138956, Aug. 7, 2003)

Q: What are the 2‐fold requirements of a valid dismissal for a just cause? A: 1. 2.

Substantive – it must be for a just cause Procedural – there must be notice and hearing

Q: What is the process to be observed by the employer (Er) for termination of the employment based on any of the just causes for termination? A: 1.

A written notice should be served to the Ee specifying the ground/s for termination and giving the said Ee reasonable opportunity to explain. Note: This first written notice must apprise the Ee that his termination is being considered due to the acts stated in the notice. (Phil. Pizza Inc. v. Bungabong, G.R. No. 154315, May 9, 2005)

2.

3.

A hearing or conference should be held during which the Ee concerned, with the assistance of counsel, if the Ee so desires, is given the opportunity to respond to the charge, present his evidence and present the evidence presented against him. A written notice of termination – If termination is the decision of the Er, it should be served on the Ee indicating that upon due considerations of all the circumstance, grounds have been established to justify his termination, at least one month prior to his termination. Note: Single notice of termination does not comply with the requirements of the law. (Aldeguer & Co., Inc. vs. Honeyline Tomboc, G.R. No. 147633, July 28, 2008)

Q: What is the purpose of notice and hearing? A:

The req’t of notice is intended to inform the Ee concerned of the Er’s intent to dismiss him and the reason for the proposed dismissal On the otherhand the req’t of hearing affords the Ee the opportunity to answer his Er’s charges against him and accordingly to defend himself there from before dismissal is effected. (Salaw v. NLRC G.R. No. 90786 Sep. 27, 1991)

Q: While it may be true that the Er enjoys wider latitude of discretion in terminating employees (Ees) should there exists valid and just cause, would this be sufficient for the Er to depart from giving the Ee the right to be heard? A: Art. 277(b) of the LC mandates that an Er who seeks to dismiss an Ee must “afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires.” Expounding on this provision, the SC held that “ample opportunity” connotes every kind of assistance that management must accord the Ee to enable him to prepare adequately for his defense including legal representation. (U‐BIX Corp. vs. Bravo, G.R. No. 177647, Oct. 31, 2008) Q: What is included in the opportunity to be heard? A: The issue was addressed in an en banc decision rendered by the Supreme Court. With a 14‐1 vote the Court through Chief Justice Corona held as follows: a)

b)

c)

“Ample opportunity to be heard” in an employee dismissal case means any meaningful opportunity (verbal or written) given to the employee to answer the charges against him or her and submit evidence in support of the defences, whether in a hearing, conference or some other fair, just and reasonable way. A formal hearing or conference becomes mandatory only when requested by the employee in writing or substantial evidentiary disputes exist or a company rule or practice requires it, or when similar circumstance justify it. The “ample opportunity to be heard” standard in the Labor Code prevails over the “hearing or conference” requirement

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UST GOLDEN NOTES 2011 in the implementing rules and regulations. (Perez v. PT&T, G.R. No. 152048, Apr. 7, 2009) Q: Who has the burden of proof? A: The burden of proof rests upon the employer to show that the dismissal of the employee is for a just cause, and failure to do so would necessarily mean that the dismissal is not justified, consonant with the constitutional guarantee of security of tenure. Note: Due process refers to the process to be followed; burden of proof refers to the amount of proof to be adduced. In money claims, the burden of proof as to the amount to be paid the Ees rests upon the Er since he is in custody of documents that would be able to prove the amount due, such as the payroll.

Q: What is the degree of proof? A: In administrative or quasi‐judicial proceedings, substantial evidence is considered sufficient in determining the legality of an employer’s dismissal of an employee. (Pangasinan III Electric Cooperative, Inc. v. NLRC, G.R. No. 89878, Nov. 13, 1992) Q: Perez and Doria were employed by PT&T. After investigation, Perez and Doria were placed on preventive suspension for 30 days for their alleged involvement in anomalous transactions in the shipping section. PT&T dismissed Perez and Doria from service for falsifying documents. They filed a complaint for illegal suspension and illegal dismissal. The LA found that the 30‐day extension of suspension and the subsequent dismissal were both illegal. The NLRC reversed the LA’s decision, it ruled that Perez and Doria were dismissed for just cause, that they were accorded due process and that they were illegally suspended for only 15 days (without stating the reason for the reduction of the period of petitioners’ illegal suspension). On appeal, CA held that they were dismissed without due process. Whether petitioners were illegally dismissed? A: Yes. The Er must establish that the dismissal is for cause in view of the security of tenure that Ees enjoy under the Constitution and the LC. PT&T failed to discharge this burden. PT&T’s illegal act of dismissing Perez and Doria was aggravated by their failure to observe due process. To meet the req’ts of due process in the dismissal of an Ee, an Er must furnish the worker with 2 written notices: (1) a written notice specifying the grounds for termination and giving to said Ee a reasonable

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opportunity to explain his side and (2) another written notice indicating that, upon due consideration of all circumstances, grounds have been established to justify the Er's decision to dismiss the Ee. There is however, no need for a hearing or conference. “To be heard” does not mean verbal argumentation alone inasmuch as one may be heard just as effectively through written explanations, submissions or pleadings. In other words, the existence of an actual, formal “trial‐ type” hearing, although preferred, is not absolutely necessary to satisfy the employee’s right to be heard. (Perez. v. Phil. Telegraph and Telephone Company, G.R. No. 152048, April 7, 2009) Q: What are the guidelines in determining whether penalty imposed on Ee is proper? A: 1. 2. 3. 4. 5.

Gravity of the offense Position occupied by the Ee Degree of damage to the employer (Er) Previous infractions of the same offense Length of service (ALU‐TUCP v. NLRC, G.R. No. 120450, Feb. 10, 1999; PAL v. PALEA, G.R. No.L‐24626, June 28,1974)

Q: Felizardo was dismissed from Republic Flour Mills‐Selecta ice cream Corporation for dishonesty and theft of company property for bringing out a pair of boots, 1 piece aluminum container and 15 pieces of hamburger patties. Is the penalty of dismissal commensurate with the offense committed? A: There is no question that the employer has the inherent right to discipline its Ees which includes the right to dismiss. However this right is subject to the police power of the State. In this case the Court finds that the penalty imposed upon Felizardo was not commensurate with the offense committed considering the value of the articles he pilfered and the fact that he had no previous derogatory record during his 2 years of employment in the company. Moreover, it should also be taken into account that Felizardo was not a managerial or confidential Ee in whom greater trust is reposed by management and from whom greater fidelity to duty is correspondingly expected. (ALU‐TUCP v. NLRC, G.R. No. 120450, Feb. 10, 1999) (1) Agabon Doctrine Q: If the dismissal is for a just or authorized cause but the requirement of due process of notice and hearing were not complied with should the dismissal be held illegal?


TERMINATION OF EMPLOYMENT A: No, In Agabon v. NLRC, G.R. No. 158693, Nov. 17, 2004, it was held that when dismissal is for just or authorized cause but due process was not observed, the dismissal should be upheld. However, the employer (Er) should be held liable for non‐compliance with the procedural req’ts of due process (e.g. damages). The Agabon ruling was modified by JAKA Food Processing v. Pacot (G.R. No. 515378, Mar. 28, 2005) where it was held that: 1. If based on just cause (Art. 282) but the Er failed to comply with the notice req’t, the sanction to be imposed upon him should be tempered because the dismissal process was, in effect, initiated by an act imputable to the Ee; and 2. If based on authorized causes (Art. 283) but the Er failed to comply with the notice req’t, the sanction should be stiffer because the dismissal process was initiated by Er’s exercise of his management prerogative. c.Reliefs for illegal dismissal (1)Reinstatement aspect Q: What are the remedies available to an illegally dismissed employee (Ee)? A: An Ee who is unjustly dismissed from work shall by entitled to: 1. Reinstatement without loss of seniority rights and 2. Full backwages. (Sec. 3, Rule I, Book VI, IRR) 3. Separation pay in lieu of reinstatement, if the latter is no longer feasible Q: What is reinstatement? A: It is the restoration of the employee to the state from which he has been unjustly removed or separated without loss of seniority rights and other privileges. (a)Immediately executory: actual reinstatement and payroll reinstatement Q: What are the forms of reinstatement? A: 1. 2.

Actual or physical – the employee (Ee) is admitted back to work Payroll – the Ee is merely reinstated in the payroll

Note: An order of reinstatement by the LA is not the same as actual reinstatement of a dismissed or separated Ee. Thus, until the Er continuously fails to actually implement the reinstatement aspect of the decision of the LA, their obligation to the illegally dismissed Ee, insofar as accrued backwages and other benefits are concerned, continues to accumulate. It is only when the illegally dismissed Ee receives the separation pay (in case of strained relations) that it could be claimed with certainty that the Er‐Ee realtionship has formally ceased thereby precluding the possibility of reinstatement. In the meantime, the illegally dismissed Ees entitlement to backwages, 13th month pay, and other benefits subsists. Until the payment of separation pay is carried out, the Er should not be allowed to remain unpunished for the delay, if not outright refusal, to immediately execute the reinstatement aspect of the LA’s decision. Further, the Er cannot refuse to reinstate the illegally dismissed Ee by claiming that the latter had already found a job elsewhere. Minimum wage earners are left with no choice after they are illegally dismissed from their employment, but to seek new employment in order to earn a decent living. Surely, we could not fault them for their perseverance in looking for and eventually securing new employment opportunities instead of remaining idle and waiting the outcome of the case. (Triad Security & Allied Services, Inc. et al v. Ortega, G.R. No. 160871, Feb. 6, 2006).

Q: Distinguish Arts. 223 from 279 of the LC? A: Art. 279 Presupposes that the judgment has already become final and executory. Consequently, there is nothing left to be done except the execution thereof.

Art. 223 May be availed of as soon as the labor arbiter renders a judgment declaring that the dismissal of the Ee is illegal and ordering said reinstatement. It may be availed of even pending appeal

Note: An award or order for reinstatement is self‐ executory. It does not require the issuance of a writ of execution. (Pioneer Texturizing Corp. v. NLRC, G.R. No. 118651, Oct. 16, 1997)

Q: PAL dismissed Garcia, for violating PAL’s Code of Discipline for allegedly sniffing shabu in PAL’s Technical Center Toolroom Section. Garcia then filed for illegal dismissal and damages where the Labor Arbiter (LA) ordered PAL to immediately reinstate Garcia. On appeal, the NLRC reversed the decision and dismissed Garcia’s complaint for lack of merit. Garcia’s motion for reconsideration was denied by the NLRC. It affirmed the validity of the writ and the notice issued by the LA but suspended and referred the action to the

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UST GOLDEN NOTES 2011 Rehabilitation Receiver for appropriate action. Whether Garcia may collect their wages during the period between the LA’s order of reinstatement pending appeal and the NLRC decision overturning that of the LA? A: Par. 3 of Art. 223 of the LC provides that the decision of the LA reinstating a dismissed or separated Ee, insofar as the reinstatement aspect is concerned, shall immediately be executory, pending appeal. Even if the order of reinstatement of the LA is reversed on appeal, it is obligatory on the part of the Er to reinstate and pay the wages of the dismissed Ee during the period of appeal until reversal by the higher court. On the other hand, if the Ee has been reinstated during the appeal period and such reinstatement order is reversed with finality, the Ee is not required to reimburse whatever salary he received for he is entitled to such, more so if he actually rendered services during the period. In other words, a dismissed Ee whose case was favorably decided by the LA is entitled to receive wages pending appeal upon reinstatement, which is immediately executory. Unless there is a restraining order, it is ministerial upon the LA to implement the order of reinstatement and it is mandatory on the Er to comply therewith. (Garcia vs. PAL, G.R. No. 164856, Jan.20, 2009) Q: What is the effect of the reversal of LA’s decision to the reinstated employee (Ee) A: If the decision of the LA is later reversed on appeal upon the finding that the ground for dismissal is valid, then the Er has the right to require the dismissed Ee on payroll reinstatement to refund the salaries he/she received while the case was pending appeal, or it can be deducted from the accrued benefits that the dismissed Ee was entitled to receive from the employer under existing laws, CBA provisions, and company practices. However, if the Ee was reinstated to work during the pendency of the appeal, then the Ee is entitled to receive the compensation received for actual services rendered without need of refund (Citibank v. NLRC, G.R. No. 142732‐33, Dec. 4, 2007). Q: May a court order the reinstatement of a dismissed employee (Ee) even if the prayer of the complaint did not include such relief? A: Yes. So long as there is a finding that the Ee was illegally dismissed, the court can order the reinstatement of an Ee even if the complaint does

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not include a prayer for reinstatement, unless, of course the Ee has waived his right to reinstatement. By law, an Ee who is unjustly dismissed is entitled to reinstatement among others. The mere fact that the complaint did not pray for reinstatement will not prejudice the Ee, because technicalities of law and procedure are frowned upon in labor proceedings (Pheschem Industrial Corp. v. Moldez, G.R. No. 1161158, May 9, 2005). Q: What happens if there is an Order of Reinstatement but the position is no longer available? A: The employee (Ee) should be given a substantially equivalent position. If no substantially equivalent position is available, reinstatement should not be ordered because that would in effect compel the employer to do the impossible. In such a situation, the Ee should merely be given a separation pay consisting of 1‐month salary for every year of service (Grolier Int’l Inc. v. ELA, G.R. No. 83523, Aug. 31, 1989) (2)Separation pay in lieu of reinstatement Q: How can separation pay be viewed? A: Under present laws and jurisprudence, separation pay may be viewed in 4 ways: 1.

2.

3.

4.

In lieu of reinstatement in illegal dismissal cases, where Ee is ordered reinstated but reinstatement is not feasible. As Er’s statutory obligation in cases of legal termination due to authorized causes under Art. 283 and 284 of the LC. As financial assistance, as an act of social justice and even in case of legal dismissal under Art. 282 of the LC. As employment benefit granted in CBA or company policy. (Poquiz, 2005)

Q: Is an illegally dismissed employee entitled to reinstatement as a matter of right? A: GR: Yes. XPNS: Proceeds from an illegal dismissal wherein reinstatement is ordered but cannot be carried out as in the following cases: 1.

Reinstatement cannot be effected in view of the long passage of time or because of the realities of the situation. 2. It would be inimical to the employers’ interest.When reinstatement is no longer feasible.


TERMINATION OF EMPLOYMENT 3. 4. 5. 6.

7.

When it will not serve the best interest of the parties involved. Company will be prejudiced by reinstatement. When it will not serve a prudent purpose. When there is resultant strained relation (applies to both confidential and managerial employees (Ees) only). When the position has been abolished (applies to both managerial, supervisory and rank‐and‐file Ees).

Note: In such cases, it would be more prudent to order payment of separation pay instead of reinstatement. (Quijano v. Mercury Drug Corporation, G.R. No. 126561, July 8, 1998)

Q: Respondents are licensed drivers of public utility jeepneys owned by Moises Capili. When Capili assumed ownership and operation of the jeepneys, the drivers were required to sign individual contracts of lease of the jeepneys. The drivers gathered the impression that signing the contract was a condition precedent before they could continue driving. The drivers stopped plying their assigned routes and a week later filed with the Labor Arbiter a complaint for illegal dismissal praying not for reinstatement but for separation pay. Are the respondents entitled to separation pay? A: No. When drivers voluntarily chose not to return to work anymore, they must be considered as having resigned from their employment. The common denominator of those instances where payment of separation pay is warranted is that the employee was dismissed by the employer. (Capili v. NLRC, G.R. 117378, Mar. 26, 1997) Q: Two groups of seasonal workers claimed separation benefits after the closure of Phil. Tobacco processing plant in Balintawak and the transfer of its tobacco operations to Candon, Ilocos Sur. Phil. Tobacco refused to grant separation pay to the workers belonging to the first batch (Lubat group), because they had not been given work during the preceding year and, hence, were no longer in its employ at the time it closed its Balintawak plant. Likewise, it claims exemption from awarding separation pay to the second batch (Luris group), because the closure of its plant was due to "serious business losses," as defined in Art. 283 of the LC. Both labor agencies held that the Luris and Lubat groups were entitled to separation pay equivalent to 1/2 month salary for every of service, provided that the Ee worked at least 1 month in a given year. Is the separation pay granted to an illegally dismissed Ee the same

as that provided under Art. 283 of the LC in case of retrenchment to prevent losses? A: No. The separation pay awarded to employees due to illegal dismissal is different from the amount of separation pay provided for in Art. 283 of the LC. Prescinding from the above, Phil. Tobacco is liable for illegal dismissal and should be responsible for the reinstatement of the Lubat group and the payment of their backwages. However, since reinstatement is no longer possible as Phil. Tobacco have already closed its Balintawak plant, members of the said group should instead be awarded normal separation pay (in lieu of reinstatement) equivalent to at least one month pay, or one month pay for every year of service, whichever is higher. It must be stressed that the separation pay being awarded to the Lubat group is due to illegal dismissal; hence, it is different from the amount of separation pay provided for in Article 283 in case of retrenchment to prevent losses or in case of closure or cessation of the Er’s business, in either of which the separation pay is equivalent to at least one (1) month or one‐half (1/2) month pay for every year of service, whichever is higher. (Phil. Tobacco Flue‐ Curing & Redrying Corp. v. NLRC, G.R. No. 127395, Dec. 10, 1998)

(a)Strained relation rule Q: What is the doctrine of strained relations? A: When the Er can no longer trust the Ee and vice versa, or there were imputations of bad faith to each other, reinstatement could not effectively serve as a remedy. This doctrine applies only to positions which require trust and confidence (Globe Mackay v. NLRC, G.R. No. 82511, March 3, 1992). Note: Under the circumstances where the employment relationship has become so strained to preclude a harmonious working relationship and that all hopes at reconciliation are naught after reinstatement, it would be more beneficial to accord the Ee backwages and separation pay.

Q: What must be proven before the principle of strained relations can be applied to a particular case? A: 1. The Ee concerned occupies a position where he enjoys the trust and confidence of his Er; and 2. That it is likely that if reinstated, an atmosphere of antipathy and antagonism may be generated as to adversely affect the efficiency and productivity of the Ee concerned. (Globe Mackay Cable & Wire

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UST GOLDEN NOTES 2011 Corp. v. NLRC G.R. No. 82511, Mar. 3, 1992) Q: Does the doctrine of strained relationship always bar reinstatement in all cases? A: No. The doctrine should be applied on a case to case basis, based on each case’s peculiar conditions and not universally. Otherwise, reinstatement can never be possible simply because some hostility is invariably engendered between the parties as a result of litigation. That is human nature. (Anscor Transport v. NLRC, G.R. No. 85894, Sept. 28, 1990) Besides, no strained relations should arise from a valid and legal act of asserting one's right; otherwise an Ee who shall assert his right could be easily separated from the service, by merely paying his separation pay on the pretext that his relationship with his employer (Er) had already become strained. (Globe Mackay Cable & Wire Corp. v. NLRC, G.R. No. 82511, Mar. 3, 1992) Q: Differentiate Art. 279 of the LC from Sec. 7 of R.A. 10022.

A: The payment of backwages is generally granted on the ground of equity. It is a form of relief that restores the income that was lost by reason of the unlawful dismissal; the grant thereof is intended to restore the earnings that would have accrued to the dismissed Ee during the period of dismissal until it is determined that the termination of employment is for a just cause. It is not private compensation or damages but is awarded in furtherance and effectuation of the public objective of the LC. Nor is it a redress of a private right but rather in the nature of a command to the employer to make public reparation for dismissing an Ee either due to the former’s unlawful act or bad faith. (Tomas Claudio Memorial College Inc., v. CA, G.R. No. 152568, Feb. 16, 2004) Q: What is the period covered by the payment of backwages? A: The backwages shall cover the period from the date of dismissal of the employee up to the date of: 1. 2.

A:

Actual reinstatement, or if reinstatement is no longer feasible Finality of judgment awarding backwages (Buhain v. CA, G.R. 143709, July 2, 2002)

Art. 279, LC (Local Workers) Reinstatement Full backwages from the time of his compensation was withheld from him up to the time of his actual reinstatement.

Sec. 7, RA 10022 (Migrant Workers) Full Reimbursement of his placement fee with interest of 12% per annum.

(3)Backwages

Note: The backwages to be awarded should not be diminished or reduced by earnings elsewhere during the period of his illegal dismissal. The reason is that the Ee while litigating the illegality of his dismissal must earn a living to support himself and his family. (Bustamante v. NLRC, G.R. No. 111651, Mar. 15, 1996; Buenviaje v. CA, G.R. No. 147806, Nov. 2002)

(a)Components of the amount of backwages Q: What is included in the computation of backwages?

Q: What are backwages? A: It is the relief given to an employee (Ee) to compensate him for the lost earnings during the period of his dismissal. It presupposes illegal termination.

A: They cover the following:

Note: Entitlement to backwages of the illegally dismissed Ee flows from law. Even if he does not ask for it, it may be given. The failure to claim backwages in the complaint for illegal dismissal is a mere procedural lapse which cannot defeat a right granted under substantive law. (St. Michael’s Institute v. Santos, G.R. No. 145280, Dec. 4, 2001)

Q: What is the basis of awarding backwages to an illegally dismissed employee (Ee)?

1. 2. 3.

Transportation and emergency allowances Vacation or service incentive leave and sick leave th 13 month pay

Note: Facilities such as uniforms, shoes, helmets and ponchos should not be included in the computation of backwages because said items are given for free, to be use only during official tour of duty not for private or personal use. The award of backwages is computed on the basis of 30‐day month. (JAM Trans Co. v. Flores, G.R. No. L‐ 63555, Mar. 19, 1993)

Q: What does the term “full backwages” mean?

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TERMINATION OF EMPLOYMENT A: The Labor Code as amended by R.A. 6715 points to "full backwages" as meaning exactly that, i.e., without deducting from backwages the earnings derived elsewhere by the concerned Ee during the period of his illegal dismissal. (Buenviaje v. CA, G.R. 147806, Nov. 12, 2002) The underlying reason for this ruling is that the employee, while litigating the legality (illegality) of his dismissal, must still earn a living to support himself and family, while full backwages have to be paid by the employer as part of the price he has to pay for illegally dismissing his Ee. (Bustamante v. NLRC, G.R. No. 111651, Mar. 15, 1996) Q: Is an Ee entitled to backwages even after the closure of the business? A: Yes. The closure of the business rendered the reinstatement of complainant to her previous position impossible but she is still entitled to the payment of backwages up to the date of dissolution or closure. An employer found guilty of unfair labor practice in dismissing his Ee may not be ordered to pay backwages beyond the date of closure of business where such closure was due to legitimate business reasons and not merely an attempt to defeat the order of reinstatement. (Pizza Inn v. NLRC, G.R. No. 74531, June 28, 1988) Q: What are the circumstances that prevent award of backwages? A: 1. Dismissal for cause 2. Death, physical or mental incapacity of the employee 3. Business reverses 4. Detention in prison (4)Constructive Dismissal Q: What is constructive dismissal? A: An involuntary resignation resorted to when: 1. 2. 3.

continued employment becomes impossible, unreasonable, or unlikely there is a demotion in rank or diminution in pay or clear discrimination, insensibility or disdain by an Er becomes unbearable to the Ee. (Leonardo v. NLRC, G.R. No.125303, June 16, 2000)

Note: There is no formal dismissal. The Ee is placed in a situation by the Er such that his continued employment has become unbearable. Abandonment is incompatible with constructive dismissal.

Q: Reynaldo was hired by Geminilou Trucking Service (GTS) as a truck driver to haul and deliver products of San Miguel Pure Foods Company, Inc. He was paid P 400 per trip and made 4 trips a day. He claimed that he was requested by GTS to sign a contract entitled “Kasunduan Sa Pag‐Upa ng Serbisyo” which he refused as he found it to alter his status as a regular Ee to merely contractual. He averred that on account of his refusal to sign the Kasunduan, his services were terminated prompting him to file a complaint before the NLRC for constructive dismissal against the GTS. Would Reynaldo’s refusal to sign the Kasunduan adequately support his allegation of constructively dismissal? A: No. The test of constructive dismissal is whether a reasonable person in the employee’s (Ee's) position would have felt compelled to give up his job under the circumstances. In the present case, the records show that the lone piece of evidence submitted by Reynaldo to substantiate his claim of constructive dismissal is an unsigned copy of the Kasunduan. This falls way short of the required quantum of proof which is substantial evidence, or such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Reynaldo was not dismissed, but that he simply failed to report for work after an altercation with a fellow driver. (Madrigalejos vs. Geminilou Trucking Service, G.R. No. 179174, Dec. 24, 2008) Q: Flores, a conductor of JAM Transportation Co., Inc., had an accident where he had to be hospitalized for a number of days. Upon reporting back to the company he was told to wait. For several days this continued and he was promised a route assignment which did not materialize. Upon speaking to Personnel Manager Medrano, he was told that he will be accepted back to work but as a new employee. Flores rejected the offer because it would mean forfeiture of his 18 years of service to the company. Is the offer for reinstatement as a new employee (Ee) a constructive dismissal? A: Yes. Flores’ re‐employment as a new Ee would be very prejudicial to him as it would mean a demotion in rank and privileges, retirement benefits as his previous 18 years of service with the company would simply be considered as non‐ existent. It amounts to constructive dismissal. (JAM Transportation Co., Inc. v. Flores, G.R. No. 82829, Mar. 19, 1993) Q: Quinanola was transferred from the position of Executive Secretary to the Executive Vice President and General Manager to the Production Dep’t as Production Secretary. Quinanola rejected the assignment and filed a complaint for illegal

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UST GOLDEN NOTES 2011 dismissal due to constructive dismissal. Did the transfer of Quinanola amount to constructive dismissal?

This period is intended only for the purpose of investigating the offense to determine whether he is to be dismissed or not. It is not a penalty.

A: No. Quinanola’s transfer was not unreasonable since it did not involve a demotion in rank nor a change in her place of work nor a diminution in pay, benefits and privileges. It did not constitute a constructive dismissal. Furthermore, an employee’s security of tenure does not give him a vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful. (Philippine Japan Active Carbon Corp. v. NLRC, G.R. No. 83239, Mar. 8, 1989)

Note: The Er may continue the period of preventive suspension provided that he pays the salary of the Ee.

Q: Sangil was a utility man/assistant steward of the passenger cruise vessel Crown odyssey under a one‐year contract. Sangil suffered head injuries after an altercation with a Greek member of the crew. He informed the captain that he no longer intends to return aboard the vessel for fear that further trouble may erupt between him and the other Greek crewmembers of the ship. Was Sangil constructively dismissed? A: Yes. There is constructive dismissal where the act of a seaman in leaving ship was not voluntary but was impelled by a legitimate desire for self‐ preservation or because of fear for his life Constructive dismissal does not always involve diminution in pay or rank but may be inferred from an act of clear discrimination, insensibility or disdain by an Er may become unbearable on the part of the Ee that it could foreclose any choice by him except to forego his continued employment. (Sunga Ship Management Phils., Inc. v. NLRC, G.R. No. 119080, April 14, 1998) (5)Preventive Suspension Q: What is preventive suspension? A: During the pendency of the investigation, the Er may place the Ee under preventive suspension leading to termination when there is an imminent threat or a reasonable possibility of a threat to the lives and properties of the Er, his family and representatives as well as the offender’s co‐workers by the continued service of the Ee. Q: What is the duration of preventive suspension? A: It should not last for more than 30 days. The Ee should be made to resume his work after 30 days. It can be extended provided the Ee’s wages are paid after the 30‐day period.

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If more than 1 month, the Ee must actually be reinstated or reinstated in the payroll. Officers are liable only if done with malice.

Q: Cantor and Pepito were preventively suspended pending application for their dismissal by Manila Doctor’s Hospital after being implicated by one Macatubal when they refused to help him when he was caught stealing x‐ray films from the hospital. Was the preventive suspension of Cantor and Pepito proper? A: Where the continued employment of an Ee poses a serious and imminent threat to the life and property of the employer or on his co‐Ees, the Ees’ preventive suspension is proper. In this case, no such threat to the life and property of the Er or of their co‐Ee’s is present and they were merely implicated by the Macatubal. (Manila Doctors Hospital v. NLRC, G.R. No 64897, Feb. 28, 1985) (6)Quitclaim Q: What is a quitclaim?

A: It is a document executed by an employee in favor of the employer preventing the former from filing any further money claim against the latter arising from employment. Q: What are the elements of a valid quitclaim? A: 1.

Voluntarily entered into with full understanding of what the employee is doing 2. Represents a reasonable settlement Q: What constitutes reasonable settlement? A: Reasonable settlement requires that the consideration for the quitclaim is credible and reasonable. (Periquet v. NLRC, G.R. No. 91298, June 22, 1990) Q: Is “dire necessity” a ground to nullify a quitclaim? A: Dire necessity is not an acceptable ground for annulling the releases, especially since it has not been shown that the employees had been forced to execute them. It has not even been proven that the considerations for the quitclaims were


TERMINATION OF EMPLOYMENT unconscionably low and that the petitioners had been tricked into accepting them. Furthermore, no deception has been established on the part of the employer that would justify the annulment of the employees’ quitclaim. (Veloso v. DOLE, G.R. No. 87297, August 5, 1991.)

A: It is the result of a bilateral act of the parties, a voluntary agreement between the employer and the employees whereby the latter after reaching a certain age agrees and/or consents to sever his employment with the former. (Soberano v. Sec. of Labor, G.R. Nos. L‐43753‐56 and L‐50991, Aug. 29, 1980)

(7)Termination of employment by employee Q: How can an employee (Ee) terminate his service with his employer (Er)? A: 1. Without just cause – by serving written notice on the Er at least 1 month in advance. The Er upon whom no such notice was served may hold the Ee liable for damages. 2. With just cause – an Ee may put an end to employment without serving any notice on the Er for any of the following just causes: a. Serious insult by the Er or his representative on the hour and person of the Ee b. Inhuman and unbearable treatment accorded the Ee by the Er or his representative c. Commission of a crime or offense by the Er or his representative against the person of the Ee or any of the immediate members of his family d. Other causes analogous to any of the foregoing Q: When is employment not deemed terminated? A: 1. Bona fide suspension of the operation of a business or undertaking for a period not exceeding 6 months, or 2. The fulfillment by the Ee of a military or civic duty shall not terminate employment. Note: In all such cases, the Er shall reinstate the Ee to his former position without loss of seniority rights if he indicates his desire to resume his work not later than 1 month from the resumption of operations of his Er or from his relief from the military or civic duty. (Art. 286)

3.RETIREMENT PAY LAW a.Coverage, Exclusions from coverage, Components of retirement pay Q: What is retirement?

Q: What are the kinds of retirement schemes? A: 1. Compulsory and contributory in nature; 2. One set up by the agreement between the employer (Er) and employees (Ees) in the CBA or other agreements between them (other applicable employment contract); 3. One that is voluntarily given by the Er, expressly as announced company policy or impliedly as in the failure to contest the Ee’s claim for retirement benefits. (Marilyn Odchimar Gertach v. Reuters Limited, Phils., G.R. No. 148542, Jan. 17, 2005) Q: Who are covered by the LC provisions on retirement? A: GR: All employees (Ees) in the private sector: 1. Regardless of their position, designation or status; and 2. Irrespective of the method by which their wages are paid. (Sec.1, Rule II, Book VI, IRR) XPN: 1. Ees of the National Gov’t and its political subdivisions, including GOCCs (if they are covered by the Civil Service Law) 2. Domestic helpers and persons in the personal service of another 3. Ees of retail, service, and agricultural establishments or operations employing not more than 10 Ees (Sec.2, Rule II, Book VI, IRR) Q: What is the retirement age? A: It is the age of retirement that is specified in the: 1. CBA; or 2. Employment contract; or 3. Retirement plan (Sec. 3, Rule II, Book VI, IRR). 4. Optional retirement age for underground mining employees: 50‐60 years provided they have at least served for a period of 5 years. (Art.285 as amended by R.A. 8558)

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UST GOLDEN NOTES 2011 Q: What is the retirement age in the absence of a retirement plan or other applicable agreement? A: 1. Optional – 60 years old / 5 years in service (includes authorized absences, vacations, regular holidays, mandatory military or civic service) Note: The option to retire upon reaching the age of 60 years or more but not beyond 65 is the exclusive prerogative of the employee (Ee) if there is no provision on retirement in a CBA or any other agreement or if the employer (Er) has no retirement plan. (R.A. 7641; Capili v. NLRC, G.R. No. 117378, Mar. 26, 1997)

2.

Compulsory – 65 years old, regardless of years of service (company is not bound to dismiss Ee; it is automatic). (Sec. 4, Rule II, Book VI, IRR) Note: Retirement benefits, where not mandated by law, may be granted by agreement of the Ees and their Er or as a voluntary act on the part of the Er. Retirement benefits are intended to help the Ee enjoy the remaining years of his life, lessening the burden of worrying for his financial support, and are a form of reward for his loyalty and service to the Er (Aquino v. NLRC, G.R. No. 87653, Feb. 11, 1992)

Q: Is compulsory retirement age below 60 allowed? A: Yes. Art. 287 permits Er and Ee to fix the applicable retirement age at below 60. The same is legal and enforceable so long as the parties agree to be governed by such CBA. (Pantranco North Express v. NLRC, G.R. No. 95940, July 24, 1996) Q: What is the rule for extension of service of retiree upon his reaching the compulsory retirement age? A: Upon the compulsory retirement of an employee (Ee) or official in the public or private service, his employment is deemed terminated. The matter of extension of service of such Ee or official is addressed to the sound discretion of the Er. (UST Faculty Union v. NLRC, G.R. No. 89885, Aug. 6,1990) Q: What are retirement benefits? A: In the absence of an applicable agreement or retirement plan – A retiree is entitled to a retirement pay equivalent to at least ½ month salary for every year of service, a fraction of at least

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6 months being considered as 1 whole year. (Sec.5.1, Rule II, Book VI, IRR) Q: What comprises ½ month salary or retirement pay? A: Unless parties provide for broader inclusions: 1. 15 days salary based on latest salary rate; 2. Cash equivalent of not more than 5 days of service incentive leaves (22.5/year of service) 3. 1/12 of the 13th month pay 4. All other benefits as may be agreed upon by the employer and employee (Ee). (Sec.5.2, Rule II, Book VI, IRR) Note: Under Sec. 26 of R.A. No. 4670,otherwise known as Magna Carta for Public School Teachers, public school teachers having fulfilled the age and service req’ts of the applicable retirement laws shall be given one range salary raise upon the retirement, which shall be the basis of the computation of the lump sum of the retirement pay and monthly benefit thereafter.

Q: Can Art. 287 of the LC (on retirement) as amended by R.A. 7641 be applied retroactively? A: Yes, provided: 1. The claimant for retirement benefits was still the employee of the employer at the time the statute took effect; and 2. The claimant was in compliance with the req’ts for eligibility under the statute for such retirement benefits. (PSVSIA v. NLRC, G.R. No. 115019, April 14, 1997) Q: Are the provisions of the retirement plan binding as part of the employment contract? A: Yes. The retirement plan forms part of the employment contract since it is made known to the Ees and accepted by them, and such plan has an express provision that the company has the choice to retire an Ee regardless of age, with 20 years of service, said policy is within the bounds contemplated by the LC. Moreover, the manner of computation of retirement benefits depends on the stipulation provided in the company retirement plan. (Progressive Dev’t Corporation v. NLRC, G.R. No. 138826, Oct.30, 2000) Q: Rivera was employed as senior manufacturing pharmacist by UNILAB. She later became Director of UNILAB's Manufacturing Division. UNILAB adopted a comprehensive retirement plan (the plan or retirement plan) supported by a retirement fund. A member is compulsorily retired upon reaching age 60 or has completed 30


TERMINATION OF EMPLOYMENT years of service, whichever comes first. Rivera completed 30 years of service and UNILAB retired her pursuant to the terms of the plan, she received the benefits in ‘88. At Rivera's request, UNILAB allowed her to continue working for the company. She continued working beyond the compulsory separation from service that resulted from her retirement. From 1993 to 1994, Rivera served as a personal consultant under contract for UNILAB’s sister companies which assigned Rivera to render service involving UNILAB. In 1992, the company amended its retirement plan, providing, among others, for an increase in retirement benefits. Rivera asked that her retirement benefits be increased in accordance with the amended retirement program. Whether Rivera is entitled to the additional retirement benefits of the amended retirement plan? A: No. Whether these terms included renewed coverage in the retirement plan is an evidentiary gap that could have been conclusively shown by evidence of deductions of contributions to the plan after 1988. Two indicators, however, tell us that no such coverage took place. The first is that the terms of the retirement plan, before and after its 1992 amendment, continued to exclude those who have rendered 30 years of service or have reached 60 years of age. Therefore, the plan could not have covered her. The second is the absence of evidence of, or of any demand for, any reimbursement of what Rivera would have paid as contributions to the plan had her coverage and deductions continued after 1988. Thus, the Court concludes that her renewed service did not have the benefit of any retirement plan coverage. (Rivera v. United Laboratories, Inc., G.R. No. 155639, April 22, 2009) Q: Is a special retirement plan different from those contemplated under the LC as agreed upon by the parties valid? A: Yes. A pilot who retires after 20 years of service or after flying 20,000 hours would still be in the prime of his life and at the peak of his career, compared to one who retires at the age of 60 years old. Based on this peculiar circumstance that PAL pilots are in, the parties provided for a special scheme of retirement different from that contemplated in the LC. Conversely, the provisions of Art. 287 of the LC could not have contemplated the situation of PAL's pilots. Rather, it was intended for those who have no more plans of employment after retirement, and are thus in need of financial assistance and reward for the years that they have rendered service. (PAL v. Airline Pilots Ass’n of the Phils., G.R. No. 143686, Jan.15, 2002)

Q: In ‘55, Hilaria was hired as a grade school teacher at the Sta. Catalina College. In ‘70, she applied for and was granted a 1 yr LOA without pay due to the illness of her mother. After the expiration in ‘71 of her LOA, she had not been heard from by Sta. Catalina. In the meantime, she was employed as a teacher at the San Pedro Parochial School during SY ‘80‐‘81 and at the Liceo de San Pedro, during SY ’81‐‘82. In ‘82, she applied anew at Sta. Catalina which hired her. On Mar 22, st ‘97, during the 51 Commencement Exercises of Sta. Catalina, Hilaria was awarded a Plaque of Appreciation for 30 yrs of service and P12,000 as gratuity pay. On May 31, ‘97, Hilaria reached the compulsory retirement age of 65. Sta. Catalina pegged her retirement benefits at P59,038.35. Deducted was the amount of P12,000 representing the gratuity pay which was given to her. Should the gratuity pay be deducted from the retirement benefits? A: No. As for the ruling of the CA affirming that of the NLRC that the P12,000 gratuity pay earlier awarded to Hilaria should not be deducted from the retirement benefits due her, the same is in order. Gratuity pay is separate and distinct from retirement benefits. It is paid purely out of generosity. Q: What is the difference between gratuity pay and retirement benefits? A: GRATUITY PAY It is paid to the beneficiary for the past services or favor rendered purely out of the generosity of the giver or grantor. It is not intended to pay a worker for actual services rendered or for actual performance. It is a money benefit or bounty given to the worker, the purpose of which is to reward Ee’s who have rendered satisfactory service to the company.

RETIREMENT BENEFITS Are intended to help the Ee enjoy the remaining years of his life, releasing him from the burden of worrying for his financial support, and are a form of reward for his loyalty to the Er. (Sta. Catalina College and Sr. Loreta Oranza, vs. NLRC and Hilaria Tercera, G.R. No. 144483. November 19, 2003, J. Carpio‐Morales)

b. Retirement pay under RA 7641 vis‐à‐vis retireent benefits under SSS and GSIS laws Q: What is retirement pay under the LC in relation to retirement benefits under SSS and GSIS laws?

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UST GOLDEN NOTES 2011 A: Social Security Law

Revised Government Service Insurance Act

Employees Compensation Act

Compulsory upon all E e s n o t o v e r 6 0 years of age and their Ers. 1.Filipinos recruited in the Phils. by foreign ‐ based Ers for employment abroad may be covered by the SSS on a voluntary basis. 2. Compulsory upon all self‐ employed persons earning P1,800 or more per annum.

Compulsory for all permanent Ees below 60 years of age upon appointment to permanent status, and for all elective officials for the duration of their tenure. 1. Any person, whether elected or appointed, in the service of an Er is a covered Ee if he receives compensation for such service.

Compulsory upon all Ers and their Ees not over 60 years of age; Provided, that an Ee who is over 60 years of age and paying contributions to qualify for the retirement or life insurance benefit administered by the System shall be subject to compulsory coverage.

Note: The Ees Compensation Commission shall ensure adequate coverage of Filipino Ees employed abroad, subject to regulations as it may prescribe. (Art. 170) Any person compulsorily covered by the GSIS including the members of the AFP, and any person employed as casual, emergency, temporary, substitute or contractual, or any person compulsorily covered by the SSS are covered by the Ee’s Compensation Program. (1997 Bar Question)

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MANAGEMENT PREROGATIVE E. MANAGEMENT PREROGATIVE Q: What is Management Prerogative? A: GR: It is the right of an Er to regulate, according to his own discretion and judgment, all aspects of employment, including: 1. Hiring 2. Work assignments 3. Working methods 4. Time, place and manner of work 5. Tools to be used 6. Processes to be followed 7. Supervision of workers 8. Working regulations 9. Transfer of Ees 10. Work supervision 11. Lay‐off of workers 12. Discipline 13. Dismissal 14. Recall of workers XPNs: Otherwise limited by special laws. Note: So long as a company’s prerogatives are exercised in good faith for the advancement of the Er’sinterest and not for the purpose of defeating or circumventing the rights of the Ees under special laws or under valid agreements, the Supreme Court will uphold them.

Q: 1. An exclusive school for girls, run by a religious order, has a policy of not employing unwed mothers, women with live‐in partners, and lesbians. Is the policy violative of any provision of the LC on employment of women? 2. The same school dismissed 2 female faculty members on account of pregnancy out of wedlock. Did the school violate any provision of the LC on employment of women? A: 1. No, the policy does not violate the LC. The practice is a valid exercise of management function. Considering the nature and reason for existence of the school, it may adopt such policy as will advance its laudable objectives. In fact, the policy accords with the constitutional precept of inculcating ethical and moral values in schools. The school policy does not discriminate against women solely on account of sex (Art. 135, LC) nor are the acts prohibited under Art. 137 of the LC. 2. No, because to tolerate pregnancy out of wedlock will be a blatant contradiction of

the school's laudable mission which, as already stated, accords with high constitutional precepts. This answer does not contradict the ruling in Chua‐Qua where the teacher merely fell in love with a bachelor student and the teacher, also single, did not get pregnant out of wedlock. (2000 Bar Question) Q: Little Hands Garment Company, an unorganized manufacturer of children's apparel with around 1,000 workers, suffered losses for the 1st first time in history when its US and European customers shifted their huge orders to China and Bangladesh. The management informed its Ees that it could no longer afford to provide transportation shuttle services. Consequently, it announced that a normal fare would be charged depending on the distance traveled by the workers availing of the service. Was the Little Hands Garments Company within its rights to withdraw this benefit which it had unilaterally been providing to its Ees? A: Yes, because this is a management prerogative which is not due any legal or contractual obligation. – The facts of the case do not state the circumstances through which the shuttle service may be considered as a benefit that ripened into a demandable right. There is no showing that the benefit has been deliberately and consistently granted, i.e. with the employer’s full consciousness that despite its not being bound by law or contract to grant it, it just the same granted the benefit. (2005 Bar Question) 1.DISCIPLINE Q: Discuss briefly the Er’s right to discipline his Ees. A: The Er has the prerogative to instill discipline in his Ees and to impose reasonable penalties, including dismissal, on erring Ees pursuant to company rules and regulations. (San Miguel Corporation v. NLRC, G.R. No. 87277, May 12, 1989) Q: Is the power of the Er to discipline his Ees absolute? A: No. While management has the prerogative to discipline its Ees and to impose appropriate penalties on erring workers, pursuant to company rules and regulations, however, such management prerogatives must be exercised in good faith for the advancement of the Er’s interest and not for the purpose of defeating or circumventing the rights of the Ees under special laws and valid agreements.

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UST GOLDEN NOTES 2011 (PLDT vs. Teves, G.R. No. 143511, November 10, 2010) Q: May the Er be compelled to share with its Ees the prerogative of formulating a code of discipline? Is a code of discipline unilaterally formulated by the Er enforceable? A: The Er has the obligation to share with its Ees its prerogative of formulating a code of discipline. This is in compliance with the State’s policy stated in Article 211 of the Labor Code, to ensure the participation of workers in decision and policy‐ making processes affecting their rights, duties and welfare. The exercise of management prerogatives has, furthermore, never been considered to be boundless. This obligation is not dispensed with by a provision in the collective bargaining agreement recognizing the exclusive right of the Er to make and enforce company rules and regulations to carry out the functions of management without having to discuss the same with the union and much less obtain the latter’s conformity thereto. A code of discipline unilaterally formulated and promulgated by the Er would be unenforceable. (Philippine Airlines, Inc. vs. NLRC et al., G.R. No. August 13, 1993.) 2.TRANSFER OF EMPLOYEES Q: Discuss briefly the Er’s right to transfer and reassign Ees. A: In the pursuit of its legitimate business interests, especially during adverse business conditions, management has the prerogative to transfer or assign Ees from one office or area of operation to another provided there is no demotion in rank or diminution of salary, benefits and other privileges and the action is not motivated by discrimination, bad faith, or effected as a form of punishment or demotion without sufficient cause. This privilege is inherent in the right of Ers to control and manage their enterprises effectively. Note: The right of Ees to security of tenure does not give them vested rights to their positions to the extent of depriving management of its prerogative to change their assignments or to transfer them. (Endico v. Quantum Foods Distribution Center, G.R. No. 161615, Jan. 30, 2009)

Q: May the Er exercise his right to transfer an Ee and compel the latter to accept the same if said transfer is coupled with or is in the nature of promotion? A: No. There is no law that compels an Ee to accept promotion, as a promotion is in the nature of a gift

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or a reward, which a person has a right to refuse. When an Ee refused to accept his promotion, he was exercising his right and cannot be punished for it. While it may be true that the right to transfer or reassign an Ee is an Er’s exclusive right and the prerogative of management, such right is not absolute. (Dosch vs. NLRC and Northwest Airlines, G.R. No. 51182, July 5, 1983) Q: Who has the burden of proving that the transfer was reasonable? A: The Er must be able to show that the transfer is not unreasonable, inconvenient or prejudicial to the Ee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Should the Er fail to overcome this burden of proof, the Ee’s transfer shall be tantamount to constructive dismissal. (Blue Dairy Corporation v. NLRC, 314 SCRA 401 [1999]) 3.PRODUCTIVITY STANDARD Q: May an Er impose productivity standards for its workers? A: Yes. An Er is entitled to impose productivity standards for its workers, and in fact, non‐ compliance may be visited with a penalty even more severe than demotion. The practice of a company in laying off workers because they failed to make the work quota has been recognized in this jurisdiction. Failure to meet the sales quota assigned to each of them constitute a just cause of their dismissal, regardless of the permanent or probationary status of their employment. Failure to observe prescribed standards of work, or to fulfill reasonable work assignments due to inefficiency may constitute just cause for dismissal. Such inefficiency is understood to mean failure to attain work goals or work quotas, either by failing to complete the same within the allotted reasonable period, or by producing unsatisfactory results. This management prerogative of requiring standards may be availed of so long as they are exercised in good faith for the advancement of the Er’s interest. (Leonardo vs. NLRC, G.R. No. 125303, June 16, 2000) 4.GRANT OF BONUS Q: What is a bonus? A: It is an amount granted and paid to an Ee for his industry and loyalty which contributed to the success of the Ers business and made possible the realization of profits. Q: Can bonus be demanded?


MANAGEMENT PREROGATIVE A: GR: Bonus is not demandable as a matter of right. It is a management prerogative given in addition to what is ordinarily received by or strictly due to recipient. (Producers Bank of the Phil. v. NLRC, G.R. No. 100701, March 28, 2001) XPNs: Given for a long period of time 1. Consistent and deliberate – Er continued giving benefit without any condition imposed for its payment 2. Er knew he was not required to give benefit 3. Nature of benefit is not dependent on profit 4. Made part of the wage or compensation agreed and stated in the employment contract. Q: The projected bonus for the Ees of Suerte Co. was 50% of their monthly compensation. Unfortunately, due to the slump in the business, the president reduced the bonus to 5% of their compensation. Can the company unilaterally reduce the amount of bonus? Explain briefly. A: Yes. The granting of a bonus is a management prerogative, something given in addition to what is ordinarily received by or strictly due the recipient. An Er cannot be forced to distribute bonuses when it can no longer afford to pay. To hold otherwise would be to penalize the Er for his past generosity. (Producers Bank of the Phil. v NLRC, G.R. No. 100701, March 28, 2001). (2002 Bar Question) 5.CHANGE OF WORKING HOURS Q: Discuss briefly the Er’s right to change working hours. A: Well‐settled is the rule that management retains the prerogative, whenever exigencies of the service so require, to change the working hours of its Ees. Q: May the normal hours fixed in Article 83 be reduced by the Er? Explain. A: The present article provides that the normal hours of work of an Ee shall not exceed eight (8) hours a day. This implies that the Er, in the exercise of its management prerogatives, may schedule a work shift consisting of less than eight hours. And following the principle of “a fair day’s wage for a fair day’s labor”, the Er is not obliged to pay an Ee, working for less than eight hours a day, the wages due for eight hours. Nonetheless, if by voluntary practice or policy, the Ee for a considerable period

of time has been paying his Ees wages due for eight hours work although the work shift less than eight hours (e.g. seven) it cannot later on increase the working hours without an increase in the pay of the employees affected. An Er is not allowed to withdraw a benefit which he has voluntarily given. An Er is not allowed to withdraw a benefit which he has voluntarily given. 6.MARITAL DISCRIMINATION Q: Is a company policy prohibiting marriage between co‐workers valid? A: There must be a finding of a bona fide occupational qualification (BFOQ) to justify an Er’s No Spouse Rule. There must be a compelling business necessity for which no alternative exists other than the discriminating practice. (Star Paper vs. Simbol, G.R. No. 164774, April 12, 2006) Q: What are the factors that the Er must prove inorder to justify BFOQ? A: The Er must prove 2 factors: 1. That the employment qualification is reasonably related to the essential operation of the job involved; and 2. That there is a factual basis for believing that all or substantially all persons meeting the qualification would be unable to properly perform the duties of the job. (Star Paper et al. vs. Simbol, G.R. No. 164774, April 12, 2006) Q: Peds was employed by Glaxo as medical representative who has a policy against Ees having relationships against competitor’s Ees. Peds married Jali, a Branch coordinator of Astra, Glaxo’s competitor. Peds was transferred to another area. Peds did not accept such transfer. Is the policy of Glaxo valid and reasonable so as to constitute the act of Peds as willful disobedience? A: The prohibition against personal or marital relationships with Ees of competitors‐companies upon Glaxo’s Ees is reasonable under the circumstances because relationships of that nature might compromise the interest of the company. Glaxo does not impose an absolute prohibition against relationships between its Ees and those of competitor companies. Its Ees are free to cultivate relationships with and marry persons of their own choosing. What the company merely seeks to avoid is a conflict of interest between the Ee and the company that may arise out of such relationships. Furthermore, the prohibition forms part of the employment contract and Peds was aware of such

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UST GOLDEN NOTES 2011 restrictions when he entered into a relationship with Jali. (Duncan Association of Detailman‐PTGWO v. Glaxo Wellcome Phil. Inc., G.R. No. 162994, Sep. 17, 2004) 7.POST‐EMPLOYMENT BAN Q: Genesis Fulgencio had been working for Solidbank Corporation since 1977. He later on applied for retirement. Solidbank required Genesis to sign an undated Undertaking where he promised that "[he] will not seek employment with a competitor bank or financial institution within one (1) year from February 28, 1995, and that any breach of the Undertaking or the provisions of the Release, Waiver and Quitclaim would entitle Solidbank to a cause of action against him before the appropriate courts of law.” Equitable Banking Corporation (Equitable) employed Genesis. Is the post‐retirement employment ban incorporated in the Undertaking which Genesis executed upon his retirement is unreasonable, oppressive, hence, contrary to public policy? A: No. There is a distinction between restrictive covenants barring an Ee to accept a post‐ employment competitive employment or restraint on trade in employment contracts and restraints on post‐retirement competitive employment in pension and retirement plans either incorporated in employment contracts or in collective bargaining agreements between the Er and the union of Ees, or separate from said contracts or collective bargaining agreements which provide that an Ee who accepts post retirement competitive employment will forfeit retirement and other benefits or will be obliged to restitute the same to the employer. The strong weight of authority is that forfeitures for engaging in subsequent competitive employment included in pension and retirement plans are valid even though unrestricted in time or geography. A post‐retirement competitive employment restriction is designed to protect the Er against competition by former Ee who may retire and obtain retirement or pension benefits and, at the same time, engage in competitive employment. (Rivera vs. Solidbank, G.R. No. 163269, April 19, 2006) 8.LIMITATIONS IN ITS EXERCISE Q: Is the exercise of management prerogative unlimited? A: No. It is circumscribed by limitations found in: 1. Law, 2. CBA, or

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3. General principles of fair play and justice Furthermore, a line must be drawn between management prerogatives regarding business operations per se and those which affect the rights of Ees. In treating the latter, management should see to it that its Ees are at least properly informed of its decisions and modes of actions. So long as a company’s prerogatives are exercised in good faith for the advancement of the Er’sinterest and not for the purpose of defeating or circumventing the rights of the Ees under special laws or under valid agreements, the Supreme Court will uphold them. (PAL v. NLRC, G.R. No. 85985, Aug. 13, 1993; San Miguel Brewery Sales v9. Ople, G.R. No. 53515, February 8, 1989) Note: It must be established that the prerogative being invoked is clearly a managerial one


SOCIAL LEGISLATION F. SOCIAL LEGISLATION Q: What is Social Legislation? A: It consists of statutes, regulations and jurisprudence that afford protection to labor, especially to working women and minors, and is in full accord with the constitutional provisions on the promotion of social justice to insure the well being and economic security of all the people. 1.SOCIAL SECURITY LAW (RA 8282) Q: What is the policy objective in the enactment of (SSS) Law? A: It is the policy of the State to establish, develop, promote and perfect a sound and viable tax‐exempt SSS suitable to the needs of the people throughout the Phils., which shall promote social justice and provide meaningful protection to members and their beneficiaries against the hazards of disability, sickness, maternity, old age, death, and other contingencies resulting in loss of income or financial burden. (Sec. 2) The enactment of SSS law is a legitimate exercise of the police power. It affords protection to labor and is in full accord with the constitutional mandate on the promotion of social justice. (Roman Catholic Archbishop of Manila v. SSS, G.R. No. 15045 Jan. 20, 1961) Q: Are the premiums considered as taxes? A: No. The funds contributed to the System belong to the members who will receive benefits, as a matter of right, whenever the hazards provided by the law occur. (CMS Estate, Inc., v. SSS, G.R. No. 26298 Sep.28, 1984) Q: Are benefits received under SSS Law part of the estate of a member? A: No. Benefits receivable under the SSS Law are in the nature of a special privilege or an arrangement secured by the law pursuant to the policy of the State to provide social security to the workingman. The benefits are specifically declared not transferable and exempt from tax, legal processes and liens. (SSS v. Davac, et. al., G.R. No.21642, July 30, 1966) Q: How are disputes settled?

A:

Social Security Commission (SSC)

CA / SC

Execution of decision

DISPUTE SETTLEMENT Disputes involving: 1. Coverage 2. Benefits 3. Contributions 4. Penalties 5. Any other matter related thereto. Note: Disputes within the mandatory period of 20 days after the submission of evidence. (Sec. 5a) Decision, in the absence of appeal, shall be final and executory 15 days after date of notification. (Sec. 5b)

Decisions of SSC shall be appealable to: 1. CA – questions of law and fact (Sec. 5c) 2. SC – questions of law. (Sec. 5c) SSC may, motu proprio or on motion of any interested party, issue a writ of execution to enforce any of its decisions or awards, after it has become final and executory. (Sec. 5d)

Q: Can the SSC validly re‐evaluate the findings of the RTC, and on its own, declare the latter’s decision to be bereft of any basis? A: No. It cannot review, much less reverse, decisions rendered by courts of law as it did in the case at bar when it declared that the CFI Order was obtained through fraud and subsequently disregarded the same, making its own findings with respect to the validity of Bailon and Alice’s marriage on the one hand and the invalidity of Bailon and Teresita’s marriage on the other. In interfering with and passing upon the CFI Order, the SSC virtually acted as an appellate court. The law does not give the SSC unfettered discretion to trifle with orders of regular courts in the exercise of its authority to determine the beneficiaries of the SSS. (SSS vs. Teresita Jarque Vda. De Bailon, G.R. No. 165545, Mar. 24, 2006, J. Carpio‐Morales) Q: Who is an employer (Er)? A: Any person, natural or juridical, domestic or foreign, who carries into the Phils. any trade, business, industry, undertaking or activity of any kind and uses the services of another person who is under his orders as regards the employment, except the Government and any of its political subdivisions, branches or instrumentalities, including corporations owned or controlled by the Government: Provided, That a self‐employed person shall be both Ee and Er at the same time. (Sec 8[c])

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UST GOLDEN NOTES 2011 Q: Who is an employee (Ee)? A: Any person who performs services for an Er in which either or both mental and physical efforts are used and who receives compensation for such services, where there is an Er‐Ee relationship: Provided, That a self‐employed person shall be both Ee and Er at the same time. (Sec. 8[d]) Q: What is employment? A: GR: Any service performed by an Ee for his Er. XPNs: 1. Employment purely casual and not for the purpose of occupation or business of the Er; 2. Service performed on or in connection with an alien vessel by an Ee if he is employed when such vessel is outside the Phils; 3. Service performed in the employ of the Phil. Government or instrumentality or agency thereof; 4. Service performed in the employ of a foreign government or international organization, or their wholly‐owned instrumentality: 5. Such other services performed by temporary and other Ees which may be excluded by regulation of the SSC. Ees of bona fide independent contractors shall not be deemed Ees of the Er engaging the services of said contractors. (Sec. 8[j]) Q: What is a contingency? A: The retirement, death, disability, injury or sickness and maternity of the member. a.Coverage Q: Who are covered by SSS? A: 1. Compulsory Coverage a. All Ees not over 60 years of age and their Ers; b. Domestic helpers whose income is not less than P 1000/month and not over 60 years of age and their Ers; Limitations: a. Any benefit earned by the Ees under private benefit plans existing at the time of the approval of the Act shall not be

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2.

discontinued, reduced or otherwise impaired; b. Existing private plans shall be integrated with the SSS but if the Er under such plan is contributing more than what is required by this Act, he shall pay to the SSS the amount required to him, and he shall continue with his contributions less the amount paid to SSS; c. Any changes, adjustments, modifications, eliminations or improvements in the benefits of the remaining private plan after the integration shall be subject to agreements between the Ers and the Ees concerned; and d. The private benefit plan which the Er shall continue for his Ees shall remain under the Ers management and control unless there is an existing agreement to the contrary c. All self‐employed – considered both an Er and Ee d. Professionals; e. Partners and single proprietors of business; f. Actors and actresses, directors, scriptwriters and news correspondents who do not fall within the definition of the term “Ee”; g. Professional athletes, coaches, trainers and jockeys; AND h. Individual farmers and fisherman. (Sec. 9) Voluntary a. Spouses who devote full time to managing the household and family affairs, unless they are also engaged in other vocation or employment which is subject to mandatory coverage ; (Sec. 9[b]) b. Filipinos recruited by foreign‐based Ers for employment abroad may be covered by the SSS on a voluntary basis; (Sec. 9[c]) c. Ee separated from employment to maintain his right to full benefits d. Self‐employed who realizes no income for a certain month

3.

By Agreement Any foreign government, international organization, or their wholly‐owned


SOCIAL LEGISLATION instrumentality employing workers in the Phils., may enter into an agreement with the Phil. government for the inclusion of such Ees in the SSS except those already covered by their respective civil service retirement systems. Q: When is the compulsory coverage deemed effective? A: 1. Employer – on the first day of operation 2. Employee – on the day of his employment 3. Compulsory coverage of self‐employed – upon his registration with the SSS Q: What is the effect of separation of an employee from his employment under compulsory coverage? A: 1. His Ers obligation to contribute arising from that employment shall cease at the end of the month of separation, 2. But said Ee shall be credited with all contributions paid on his behalf and entitled to benefits according to the provisions of R.A. 9282. 3. He may, however, continue to pay the total contributions to maintain his right to full benefit. (Sec. 11) Note: The above provision recognizes the “once a member, always a member” rule.

Q: What is the effect of interruption of business or professional income? A: If the self‐employed member realizes no income in any given month: 1. He shall not be required to pay contributions for that month. 2. He may, however, be allowed to continue paying contributions under the same rules and regulations applicable to a separated Ee member: 3. Provided, that no retroactive payment of contributions shall be allowed other than as prescribed under Sec.22‐A. (Sec. 11‐A) Q: On her way home from work, Asteria Benedicta, a machine operator in a sash factory, enters a movie house to relax. But she is stabbed by an unknown assailant. Her claim for benefits under the SSS Law is denied on the ground that her injury is not work‐connected. Is the denial legal? Why?

A: No. It is not necessary, for the enjoyment of benefits under the SSS Law that the injury is work‐ connected. What is important is membership in the SSS and not the causal connection of the work of the Ee to his injury or sickness. Claims based on work‐connected injuries or occupational diseases are covered by the State Insurance Fund. b.Exclusions from coverage Q: Enumerate the kinds of employment which are excepted from compulsory coverage under the SSS Law. A: Under Section 8(j) of R.A. 1161, as amended, the following services or employments are excepted from coverage: 1. Employment purely casual and not for the purpose of occupation or business of the employer; 2. Service performed on or in connection with an alien vessel by an employee if he is employed when such vessel is outside the Philippines; 3. Service performed in the employ of the Philippine Government or instrumentality or agency thereof; 4. Service performed in the employ of a foreign government or international organization, or their wholly‐owned instrumentality: Provided, however, That this exemption notwithstanding, any foreign government, international organization or their wholly‐ owned instrumentality employing workers in the Philippines or employing Filipinos outside of the Philippines, may enter into an agreement with the Philippine Government for the inclusion of such employees in the SSS except those already covered by their respective civil service retirement systems:Provided, further, That the terms of such agreement shall conform with the provisions of this Act on coverage and amount of payment of contributions and benefits: Provided, finally, That the provisions of this Act shall be supplementary to any such agreement; and

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Such other services performed by temporary and other employees which may be excluded by regulation of the Commission. Employees of bona fide independent contractors shall not be deemed employees of the employer engaging the service of said contractors.

c.Benefits Q: What are the benefits under the SSS Act? A: 1. Monthly Pension 2. Retirement Benefits 3. Death Benefits 4. Disability Benefits 5. Funeral Benefits 6. Sickness Benefits 7. Maternity Benefits Q: Are the benefits provided for in the SSS Law transferable? A: Benefits provided for in the SSS Law are not transferable and no power of attorney or other document executed by those entitled thereto in favor of any agent, attorney or any other person for the collection thereof on their behalf shall be recognized, except when they are physically unable to collect personally such benefits. (Sec.15, R.A. 1161, as amended) Q: What are the reportorial requirements of the Er and self‐employed? A: 1. Er ‐ Report immediately to SSS the names, ages, civil status, occupations, salaries and dependents of all his covered Ees 2. Self‐employed ‐ Report to SSS within 30 days from the first day of his operation, his name, age, civil status, occupation, average monthly net income and his dependents Monthly Pension Q: How much is the monthly pension? A: 1. The monthly pension shall be the highest of the following amounts: a. The sum of the following: ii. P300.00; plus iii. 20% of the average monthly salary credit; plus

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2.

iv. 2% of the average monthly salary credit for each credited year of service in excess of 10 years; or b. 40% of the average monthly salary credit; or c. P1,000.00, provided that the monthly pension shall in no case be paid for an aggregate amount of less than sixty (60) months (Sec. 12 [a]) Minimum Pension a. P1,200.00 ‐ members with at least 10 credited years of service b. P2,400.00 for those with 20 credited years of service. (Sec. [b])

Q: What will happen to the monthly pension of a retiree in case of death? A: 1. Upon the death of the retired member, his primary beneficiaries as of the date of his retirement will get 100% of his monthly pension plus the dependent's pension for each child. Note: The above phrase “primary beneficiaries (as of the date of his retirement) was declared unconstitutional by the SC in Dycaico v. SSS and SSC (G.R. No. 16137, June 6, 2006) because it is in violation of the equal protection, due process and social justice.

2.

If he dies within 60 months from the start of his pension and he has no primary beneficiaries, his secondary beneficiaries will receive a lump sum benefit equivalent to the difference of 60 multiplied by the monthly pension and the total monthly pensions paid by the SSS excluding the dependent's pension. (Sec. 12‐B [d]) Q: Bonifacio and Elena are living together as husband and wife without the benefit of marriage. Bonifacio declared Elena and their children as his primary beneficiaries in his self‐ employed data record in SSS. A few months prior to his death, Bonifacio married Elena.Is Elena entitled to the survivor’s pension? A: Yes, she is considered primary beneficiary of Bonifacio. The phrase “Upon the death of the retired member, his primary beneficiaries as of the date of his retirement will get 100 per cent of his monthly pension xxx” of Sec. 12‐B d of RA 8282 is unconstitutional because it violates the: (1) equal protection clause because it impermissibly discriminates against dependent spouses whose


SOCIAL LEGISLATION respective marriages to the SSS members were contracted after the latter’s retirement; (2) due process clause because it outrightly deprives spouses who married the SSS members after their retirement of the survivor’s pension, a property interest, without giving them opportunity to be heard; and (3) social justice. Further, the survivorship pension applied for was classified as death benefits. Hence, the contingency that gives rise to the entitlement of Elena is the death of Bonifacio and not his retirement. (Dycaico v. SSS, G. R. No. 16137, June 6, 2006) Q: When is the monthly pension and dependent’s pension suspended? A: 1. Upon the reemployment or resumption of self‐employment 2. Recovery of the disabled member from his permanent total disability 3. Failure to present himself for examination at least once a year upon notice by the SSS. (Sec. 13‐A [b]) Retirement Benefit Q: What is a retirement benefit? A: It is a cash benefit paid to a member who can no longer work due to old age. Q: What are the types of retirement benefits? A: 1. Monthly Pension ‐ Lifetime cash benefit paid to a retiree who has paid at least 120 monthly contributions to the SSS prior to the semester of retirement . 2. Lump Sum Amount ‐ Granted to a retiree who has not paid the required 120 monthly contributions. Q: Who are entitled for retirement benefits? A: 1. A member who a. has paid at least 120 monthly contributions prior to the semester of retirement; b. at least 60 years old; and c. already separated from employment or has ceased to be self‐employed, OR 2. At least 65 years old, shall be entitled for as long as he lives to the monthly pension; (Sec 12‐B [a])

3.

A member a. At least 60 years old at retirement; and b. Does not qualify for pension benefits under paragraph (a) above ‐ entitled to a lump sum benefit equal to the total contributions paid by him and on his behalf; c. Must be separated from employment and is not continuing payment of contributions to the SSS on his own. (Sec. 12‐B [b])

Q: What happens when the retirement pensioner is re‐employed or resumes self‐employment? A: The monthly pension of a retirement pensioner who resumes employment and is less than 65 years old will be suspended. He and his Er will again be subject to compulsory coverage. (Sec. 12‐B [c]) Q: Are the children of a retiree member entitled to the dependent's pension? A: Yes (Sec. 12[A]). However, only 5 minor children, beginning from the youngest, are entitled to the dependents' pension. No substitution is allowed. Where there are more than 5 legitimate and illegitimate children, the legitimate ones will be preferred. Q: For how long will the dependent child receive the pension? A: Until the child reaches 21 years of age, gets married, gets employed and earns P300 a month or more, or dies. However, the dependent's pension is granted for life to children who are over 21 years old, provided they are incapacitated and incapable of self‐support due to physical or mental defect which is congenital or acquired during minority. Death Benefit Q: When is a beneficiary entitled to death benefits? A: 1. Upon death of a member, if he has paid at least 36 monthly contributions prior to the semester of death: a. primary beneficiaries shall be entitled to the monthly pension; or b. If there are no primary beneficiaries, secondary beneficiaries shall be

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UST GOLDEN NOTES 2011 entitled to a lump sum benefit equivalent to 36 times the monthly pension. Upon death of a member If he has not paid the required 36 monthly contributions prior to the semester of death: a. Primary or secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the monthly pension multiplied by the number of monthly contributions paid to the SSS: or b. 12 times the monthly pension, whichever is higher. (Sec. 13)

2.

Disability Benefit Q: What is a disability benefit? A: It is a cash benefit paid to a member who becomes permanently disabled, either partially or totally. Q: What is the difference between death benefits and Permanent Total Disability benefits? A: Death Benefits

PTD Benefits Requisite

at least 36 monthly contributions Benefits payable to whom Primary Beneficiaries

Member

Failure to make 36 monthly payments Benefits shall be in lump sum equivalent to the monthly pension times the number of monthly contributions paid to SSS or 12 times the monthly pension, whichever is higher.

Q: What is the effect of the death of the PTD pensioner? A: 1. Primary beneficiaries are entitled to receive monthly pension as of the date of disability. 2. No primary beneficiaries and he dies within 60 months from the start of his monthly pension ‐ secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the total monthly pensions corresponding to the balance of the 5‐ year guaranteed period excluding the dependents’ pension. (Sec. 13‐A [c]) Q: What is the effect of retirement or death to partial disability pension?

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A: Disability pension shall cease upon his retirement or death. (Sec 13‐A [j]) Funeral Benefit Q: What is the funeral benefit? A: A funeral grant equivalent to P12, 000.00 shall be paid, in cash or in kind, to help defray the cost of expenses upon the death of a member or retiree. (Sec. 13‐B) Sickness Benefit Q: What is sickness benefit? A: It is a daily cash allowance paid for the number of days a member is unable to work due to sickness or injury. Q: What are the requirements to be entitled for sickness benefit? A: 1. The member paid at least 3 monthly contributions in the 12‐month period immediately preceding the semester of sickness or injury 2. Confined for more than 3 days in a hospital or elsewhere with the approval of the SSS 3. He has used all current company sick leaves with pay for the current year 4. Notified his Er or the SSS, if he is a separated, voluntary or self‐employed member Q: Who will pay sickness benefits? and how much is the benefit? A: The Er shall pay the: 1. Ee for each compensable confinement or fraction thereof or 2. SSS if member is self‐employed daily sickness benefit equivalent to 90% of his average daily salary credit, subject to the following conditions: a. In no case shall the daily sickness benefit be paid longer than 120 days in 1 calendar year, nor shall any unused portion of the 120 days of sickness benefit granted be carried forward and added to the total number of compensable days allowable in the subsequent year;


SOCIAL LEGISLATION b.

c.

3.

4.

Not paid for more than 240 days on account of the same confinement; and Ee member shall notify his Er of the fact of his sickness or injury within 5 calendar days after the start of his confinement unless such confinement: i. is in a hospital ii. the Ee became sick or was injured while working or within the premises of the Er (notification to the Er not necessary);

If the member is unemployed or self‐ employed, he shall directly notify the SSS of his confinement within 5 calendar days after the start thereof unless such confinement is in a hospital in which case notification is also not necessary; Where notification is necessary, confinement shall be deemed to have started not earlier than the 5th day immediately preceding the date of notification. (Sec.14 [b])

Note: The law does not require that sickness must be related to the duties of the beneficiaries.

Q: When will compensable confinement commence? A: 1. Begins on the 1st day of sickness 2. Payment of such allowances shall be promptly made by the Er: a. every regular payday or on the 15th and last day of each month, b. in case of direct payment by the SSS ‐ as long as such allowances are due and payable. (Sec. 14[b]) Q: What are the requirements in order that Er may claim reimbursement of the sickness benefit? A: 1. 100% of daily benefits shall be reimbursed by SSS if the following requirements are satisfied: a. Receipt of SSS of satisfactory proof of such payment and legality thereof: b. The Er has notified the SSS of the confinement within 5 calendar days after receipt of the notification from the Ee member:

2.

Er shall be reimbursed only for each day th of confinement starting from the 10 calendar day immediately preceding the date of notification to the SSS if the notification to the SSS is made beyond 5 calendar days after receipt of the notification from the Ee member. (Sec. 14 [c]) Q: When will reimbursement be made by SSS? A:GR: SSS shall reimburse the Er or pay the unemployed member only for confinement within 1 year immediately preceding the date the claim for benefit or reimbursement is received by the SSS XPN: Confinement in a hospital in which case the claim for benefit or reimbursement must be filed within 1 year from the last day of confinement. (Sec. 14[c]) Maternity Benefit Q: What is the maternity benefit? A: The maternity benefit is a daily cash allowance granted to a female member who was unable to work due to childbirth or miscarriage. Q: What are the qualifications for entitlement to the maternity benefit? A: 1. She has paid at least three monthly contributions within the 12‐month period immediately preceding the semester of her childbirth or miscarriage. 2. She has given the required notification of her pregnancy through her employer if employed, or to the SSS if separated, voluntary or self‐employed member. Q: Is the voluntary or self‐employed member also entitled to the maternity benefit? A: Yes, A voluntary or a self‐employed member is entitled to the maternity benefit provided that she meets the qualifying conditions. Q: How much is the maternity benefit? A: The maternity benefit is equivalent to 100 per cent of the member’s average daily salary credit multiplied by 60 days for normal delivery or miscarriage, 78 days for caesarean section delivery. Q: How is the maternity benefit computed?

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UST GOLDEN NOTES 2011 A: 1.

Exclude the semester of contingency (delivery or miscarriage).

Note: Semester refers to two consecutive quarters ending in the quarter of contingency. Quarter refers to three consecutive months ending March, June, September or December.

2.

3.

Count 12 months backwards starting from the month immediately before the semester of contingency. Identify the six highest monthly salary credits within the 12‐month period.

Note: Monthly salary credit means the compensation base for contributions benefits related to the total earnings for the month.

4. 5.

6.

Add the six highest monthly salary credits to get the total monthly salary credit. Divide the total monthly salary credit by 180 days to get the average daily salary credit. This is equivalent to the daily maternity allowance. Multiply the daily maternity allowance by 60 (for normal delivery or miscarriage) or 78 days (for caesarean section delivery) to get the total amount of maternity benefit.

Q: What is the difference of compensability under the Labor Law and the Social Security Law? A: The claims are different as to their nature and purpose. (Ortega vs. Social Security Commission, G.R. No. 176150, June 25, 2008) LABOR LAW

SOCIAL SECURITY LAW Purpose Governs compensability Benefits are intended to provide insurance or of : protection against the 1. work‐related hazards or risks of disabilities 2. when there is loss disability, sickness, old of income due to age or death, inter alia, irrespective of whether work‐connected or work‐ they arose from or in the of the aggravated injury course employment. or illness. Nature may be A disability is total and Disability permanent if as a result of permanent total or the injury or sickness the permanent partial. Ee is unable to perform

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any gainful occupation for a continuous period exceeding 120 days regardless of whether he loses the use of any of his body parts.

d.Beneficiaries Q: Who are primary beneficiaries? A: 1. The dependent spouse until he or she remarries 2. The dependent legitimate, legitimated or legally adopted, and illegitimate children,: Provided, That the dependent illegitimate children shall be entitled to 50% of the share of the legitimate, legitimated or legally adopted children. Q: Who are secondary beneficiaries? A: In the absence of primary beneficiaries, the dependent parents. In the absence of all the foregoing, any other person designated by the member as his or her secondary beneficiary. (Sec. 8[k]) Q: Who are considered dependents? A: 1. The legal spouse entitled by law to receive support from the member; 2. The legitimate, legitimated, or legally adopted, and illegitimate child who: a. Is unmarried, b. Not gainfully employed, and c. Has not reached 21 years of age, or if over 21 years of age, he is congenitally or while still a minor has been permanently incapacitated and incapable of self‐support, physically or mentally. 3. The parent who is receiving regular support from the member. Q: What is meant by “dependent for support”? A: The entitlement to benefits as a primary beneficiary requires not only legitimacy but also dependence upon the member Ee. (Gil v. SSC CA‐ GR SP. 37150, May 8, 1996) If a wife who is already separated de facto from her husband cannot be said to be "dependent for support" upon the husband, absent any showing to


SOCIAL LEGISLATION the contrary. Conversely, if it is proved that the husband and wife were still living together at the time of his death, it would be safe to presume that she was dependent on the husband for support, unless it is shown that she is capable of providing for herself. (SSS v. Aguas, G.R. No. 165546, Feb. 27, 2006) Q: Who is entitled to the benefits of an SSS member who was survived not only by his legal wife, who is not dependent upon the member, but also by two common‐law wives with whom he had illegitimate minor children? A: The illegitimate minor children shall be entitled to the death benefits as primary beneficiaries because the legal wife is not dependent upon the member. The SSS Law is clear that for a minor child to qualify as a “dependent” the only requirements are that he/she must be below 21 yrs. of age, not married nor gainfully employed. (Signey v. SSS, G.R. No. 173582, Jan.28, 2008) Q: What is compensation? A: All actual remuneration for employment, including the mandated cost of living allowance, as well as the cash value of any remuneration paid in any medium other than cash except that part of the remuneration received during the month in excess of the maximum salary. Q: The owners of FALCON Factory, a company engaged in the assembling of automotive components, decided to have their building renovated. (50) persons, composed of engineers, architects and other construction workers, were hired by the company for this purpose. The work was estimated to be completed in 3 years. The Ees contended that since the work would be completed after more than 1 year, they should be subject to compulsory coverage under the Social Security Law. Do you agree with their contention? Explain your answer fully. A: No. Under Sec. 8 (j) of R.A. 1161, as amended, employment of purely casual and not for the purpose of the occupation or business of the employer are excepted from compulsory coverage. An employment is purely casual if it is not for the purpose of occupation or business of the Er. In the problem given, Falcon Factory is a company engaged in the assembly of automotive components. The 50 persons (engineers, architects and construction workers) were hired by Falcon Factory to renovate its building. The work to be

performed by these 50 people is not in connection with the purpose of the business of the factory. Hence, the employment of these 50 persons is purely casual. They are, therefore, excepted from the compulsory coverage of the SSS law. (2000 Bar Question) 2.GSIS (R.A. 8291) Q: What are the purposes behind the enactment of the GSIS Act? A: To provide and administer the following social security benefits for government employees (Ee): 1. Compulsory life insurance 2. Optional life insurance 3. Retirement benefits 4. Disability benefits to work‐related contingencies; and 5. Death benefits Q: Who are considered employers (Er) under the GSIS Act? A: 1. National Government 2. Its political subdivisions, branches, agencies, instrumentalities 3. GOCCs, and financial institutions with original charters 4. Constitutional Commissions and the Judiciary (Sec. 2[c]) Q: Can SSS Ees be covered by GSIS? A: Yes. Q: Who is an Employee or member? A: Any person, receiving compensation while in the service of an Er, whether by election or appointment, irrespective of status of appointment, including barangay and sanggunian officials. (Sec. 2[d]) Q: What is compensation? A: The basic pay or salary received by an Ee, pursuant to his or her election or appointment, excluding per diems, bonuses, OT pay, honoraria, allowances and any other emoluments received in addition to the basic pay which are not integrated into the basic pay under existing laws. (Sec. 2[i]) Q: Baradero is a member of the Sangguniang Bayan of the Municipality of La Castellana, Negros

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UST GOLDEN NOTES 2011 Occ. and is paid on a per diem basis. On the other hand, Belo a Vice‐Governor of Capiz is in a hold over capacity and is paid on a per diem basis. Are the services rendered by Baradero and Belo on a per diem basis creditable in computing the length of service for retirement purposes? A: Yes. The traditional meaning of per diem is a reimbursement for extra expenses incurred by the public official in the performance of his duties. Under this definition the per diem is intended to cover the cost of lodging and subsistence of officers and employees when the latter are on a duty outside of their permanent station. On the other hand, a per diem could rightfully be considered a compensation or remuneration attached to an office. The per diems paid to Baradero and Belo were in the nature of compensation or remuneration for their services as Sangguniang Bayan and Vice‐ Governor, respectively, rather than a reimbursement for incidental expenses incurred while away from their home base. If the remuneration received by a public official in the performance of his duties does not constitute a mere “allowance for expenses” but appears to be his actual base pay, then no amount of categorizing the salary as a “per diem” would take the allowances received from the term service with compensation for the purpose of computing the number of years of service in government. (GSIS v. CSC, G. R. Nos. 98395 and 102449, June 19, 1995) Q: What are the sources of funds of the GSIS? A: It comes from the monthly contributions of the covered Ees and Ers. (Sec. 5) The contributions of the Ees are deducted and withheld by the Er each month from the monthly salary of the former and are remitted by the latter, together with its own share, to the System within the first 10 days of each calendar month following the month to which the contributions apply. (Sec. 6) Q: What is the penalty in case of delayed remittance or non‐remittance of contributions? A: The unremitted contributions shall be charged interests as prescribed by the GSIS Board of Trustees but shall not be less than 2% simple interest per month from due date to the date of payment by the employers concerned.

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a.Coverage Q: What government Ees are subject to coverage under the GSIS? A: GR: All Ees receiving compensation who have not reached the compulsory retirement age, irrespective of employment status. XPNs: 1. Uniformed members of the: a. AFP; and b. PNP. 2. Contractuals who have no Er and Ee relationship with the agencies they serve. Q: Who are covered by life insurance, retirement and other social security protection? A: GR: All members of the GSIS shall have life insurance, retirement, and all other social security protections such as disability, survivorship, separation, and unemployment benefits. (Sec. 3) XPNs: Members of: 1. The judiciary; and 2. Constitutional commissions who shall have life insurance only. b.Exclusions from coverage Q: Who, under the GSIS, are excluded from the coverage? A: 1. Ees who have separate retirement schemes (members of the Judiciary, Constitutional Commissions and others similarly situated) 2. Contractual Ees who have no Er‐Ee with the agencies they serve 3. Uniformed members of the AFP, BJMP, whose coverage by the GSIS has ceased effective June 24, 1997 4. Uniformed members of the PNP whose coverage by the GSIS has ceased effective February 1, 1996. (Sec. 2.4, Rule II, IRR) Q: For the purpose of benefit entitlement, how are the members classified? A: 1. Active members a. Still in the service and are paying integrated premiums.


SOCIAL LEGISLATION b.

Covered for the entire package benefits and privileges being extended by GSIS.

2. Policyholders a. Covered for life insurance only b. Can avail of policy loan privilege only c. May also apply for housing loans d. Judiciary and Constitutional Commissions 3. Retired Members a. Former active members who have retired from the service and are already enjoying the corresponding retirement benefits applied for b. Not entitled to any loan privilege, except stock purchase loan (Sec. 2.2, Rules II, IRR) c.Benefits Q: What are the benefits provided by the GSIS Act? A: 1. Separation 2. Unemployment or involuntary separation 3. Retirement 4. Permanent disability 5. Temporary disability 6. Survivorship 7. Funeral 8. Life Insurance 9. Such other benefits and protection as may be extended to them by the GSIS such as loans. Q: What are the benefits under P.D. 1146 (Revised GSIS Act of 1977) that may be granted to the separated members of the PNP, BJMP and BFP? A: GR: 1. Old‐age benefit 2. Permanent disability benefit 3. Survivorship benefit 4. Funeral benefit 5. Retirement benefit XPN: Judiciary (Life insurance only – tax exempt) Q: What are the reportorial requirements of the Er? A: Er must report to GSIS the names, employment status, positions, salaries of the employee and such other matter as determined by the GSIS.

Separation Benefits Q: When will a member be entitled to separation benefits and what comprises these separation benefits? A: A member who has rendered a minimum of 3 years creditable service shall be entitled to separation benefit upon resignation or separation under the following terms: 1. A member with at least 3 years but less than 15 years: Cash payment equivalent to 100% of the AMC for every year of service the member has paid contributions: a. not less than P12,000.00 b. Payable upon reaching 60 years of age or upon separation, whichever comes later. 2. A member with less than 15 years of service and less than 60 years of age at the time of resignation or separation: a. Cash payment equivalent to 18 times the basic monthly pension (BMP), payable at the time of resignation or separation b. An old‐age pension benefit equal to the basic monthly pension, payable monthly for life upon reaching the age of 60. Q: What are the effects of separation from service with regard to membership? A: A member separated from the service shall continue to be a member and shall be entitled to whatever benefits he has qualified to. Note: A member separated for a valid cause shall automatically forfeit his benefits, unless the terms of resignation or separation provide otherwise. In the case of forfeiture, the separated employee shall be entitled to receive only ½ of the cash surrender value of his insurance.

Unemployment Benefits Q: What are the conditions for entitlement to unemployment benefits? A: 1. The recipient must be a permanent employee at the time of separation; 2. His separation was involuntary due to the abolition of his office or position resulting from reorganization; and

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He has been paying the contribution for at least 1 year prior to separation.

Q: What will consist of an unemployment benefit? A: It will consists of cash payment equivalent to 50% of the average monthly compensation Note: A member who has rendered at least 15 years of service will be entitled to separation benefits instead of unemployment benefits.

Retirement Benefits Q: What are the conditions in order to be entitled to retirement benefits? A: 1. A member has rendered at least 15 years of service; 2. He is at least 60 years of age at the time of retirement; and 3. He is not receiving a monthly pension benefit from permanent total disability. (Sec. 13‐A) Q: What is the rule in case of extension of service in order to be entitled for retirement benefit? A: The doctrine in Cena vs. CSC (G.R. No. 97419, July 3, 1992), was modified in Rabor vs. CSC, (G.R. No. 111812, May 31, 1995), where the SC held that: The head of the government agency concerned is vested with discretionary authority to allow or disallow extension of the service of an official or Ee who has reached 65 years old without completing the 15 years of government service. However, this discretion is to be exercise conformably with the provisions of Civil Service Memorandum Circular No. 27, series of 1990 which provides that the extension shall not exceed 1 year. Q: What is the reason for compulsory retirement? A: The compulsory retirement of government officials and Ees upon their reaching the age of 65 years is founded on public policy which aims by it to maintain efficiency in the government service and at the same time give to the retiring public servants the opportunity to enjoy during the remainder of their lives the recompense, for their long service and devotion to the government , in the form of a comparatively easier life, freed from the rigors of civil service discipline and the exacting demands that the nature of their work and their relations with their superiors as well as the public would impose upon them. (Beronilla v. GSIS, G.R. No. 21723, Nov. 26, 1970)

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Q: What are the options of the retiree with regard to his or her retirement benefits? A: The retiree may get either of the following: 1. Lump sum equivalent to 6 months of the basic monthly pension (BMP) payable at the time of retirement and an old‐age pension benefit equal to BMP payable for life, starting upon the expiration of the 5 years covered by the lump sum; or 2. Cash payment equivalent to 18 times his BMP and monthly pension for life payable immediately. (Sec. 13[a]) Permanent Disability Benefits Q: What is disability? A: Any loss or impairment of the normal functions of the physical and/or mental faculty of a member, which reduces or eliminates his/her capacity to continue with his/her current gainful occupation or engage in any other gainful occupation. Q: What is total disability? A: Complete incapacity to continue with present employment or engage in any gainful occupation due to the loss or impairment of the normal functions of the physical and/or mental faculties of the member. Q: What is permanent total disability (PTD)? A: Accrues or arises when recovery from impairment mentioned in Sec.2(q) (defining disability) is medically remote. Q: What is permanent partial disability (PPD)? A: Accrues or arises upon the irrevocable loss or impairment of certain portions of the physical faculties, despite which the member is able to pursue a gainful occupation. Q: What are the conditions in order to be entitled for permanent disability benefits? A: The permanent disability was not due to any of the ff: 1. Grave misconduct 2. Notorious negligence 3. Habitual intoxication 4. Willful intention to kill himself or another


SOCIAL LEGISLATION Q: What are the two types of permanent disability? A: 1. Permanent total disability (PTD) ‐ accrues or arises when recovery from any loss or impairment of the normal functions of the physical and/or mental faculty of a member which reduces or eliminates his capacity to continue with his current gainful occupation or engage in any other gainful occupation is medically remote. [Section 2 (q) and (s)] 2. Permanent partial disability (PPD) ‐ accrues or arises upon the irrevocable loss or impairment of certain portion/s of the physical faculties, despite which the member is able to pursue a gainful occupation. (Sec. 2[u])

PTD

PPD

Causes and Complete loss of sight Complete permanent loss of the of both eyes use of: 2. Loss of 2 limbs at or above the ankle or 1. Any finger wrist 3. Permanent complete 2. Any toe 3. One arm paralysis of 2 limbs 4. One hand 4. Brain injury resulting in incurable imbecility 5. One foot 6. One leg or insanity 7. One or both ears 5. Such other cases as 8. Hearing of one or both may be determined ears by the GSIS 9. Sight of one eye Such other causes as determined by GSIS Benefits 1. A member is entitled to A member is entitled to payment in the monthly income cash benefit for life equivalent accordance with the schedule of disabilities to to the BMP when: a. He is in the service be prescribed by GSIS, if at the time of the he satisfies the given conditions of either (1) disability or b. If separated from or (2) of Sec. 16(a). service c. He has paid at least 36 monthly contributions within 5 years immediately preceding his disability d. He has paid a total of at least 180 monthly 1.

e.

contribution prior his disability He is not receiving old‐age retirement pension benefits

2. If the member does not satisfy the conditions above but has rendered at least 3 years service, he shall be advanced the cash payment equivalent to 100% of his average monthly compensation for each year of service he has pad contributions but not less than P12,000.00 which should have been his separation benefit (he shall no longer receive separation benefits)

Q: When will the payment of these benefits be suspended? A: 1. In case a member is re‐employed; or 2. Member recovers from disability as determined by the GSIS; or 3. Fails to present himself for medical examination when required by the GSIS. (Sec. 16 [c]) Q: Manioso was suffering from several diseases from 1959 to 1994 when he worked as Accounting Clerk I at the Budget Commission up to the time he was transferred and promoted to the DENR as Senior Bookkeeper. On ‘95, he was hospitalized. The results of his examinations showed that he was suffering from Acute Myocardial Infarction and Hypertensive Vascular Disease. From Jan‐ May ‘95 when he compulsory retired from government service and after serving for 36 yrs, he no longer reported for work. His sick leave covering said period was duly approved. In the meantime, Manioso filed a claim for income benefits with the GSIS which found his ailments work‐related. He was granted Temporary Total Disability benefits for 2 months. He was later granted Permanent Partial Disability benefits for 8 months. It appears that he appealed for more disability benefits with the GSIS which subjected him to a series of medical tests. In ‘97, he was brought to the PGH several times due to Chronic Renal Infection 2˚ to Obstructive Uropathy 2˚ to Staghorn Calculi (L) and Benign Prostatic Hypertrophy; Diabetes Mellitus Neprophaty, Stage IV, and Hypertensive Nephrosclerosis. He then filed a request with the GSIS for additional disability benefits, claiming that the ailments for

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UST GOLDEN NOTES 2011 which he was hospitalized several times in ‘97 developed from his work‐related illnesses. The GSIS disapproved Manioso’s request. Do Manioso’s ailments which later developed fall under the category of permanent total disability? A: Yes. Under Art. 192 (c) of P.D. No. 442, as amended (the LC), the following disabilities are deemed total and permanent: (1) Temporary total disability lasting continuously for more than 120 days. Under Section 2(b), Rule VII of the Amended Rules on Ee’s Compensation, “[a] disability is total and permanent if as a result of the injury or sickness the Ee is unable to perform any gainful occupation for a continuous period exceeding 120 days, except as otherwise provided under Rule X of these Rules.” In the case at bar, Manioso was on sick leave from Jan 11, ‘95 up to his date of retirement on May 15, ‘95 or for a period of more than 120 days. Surely, the DENR, in approving his more than 120 days leave must have passed upon his Medical Certificate relative to his ailments. Manioso’s disability having lasted for more than 120 days, he is entitled to PTD benefits. (Manioso, v. GSIS, G.R. No. 148323, Apr. 29, 2005) Q: Does Manioso’s retirement from service prevent him from entitlement to PTD benefits? A: No. Benefits due an Ee due to work‐related sickness shall be provided until he becomes gainfully employed, or until his recovery or death. None of these are present in Manioso’s case. It would be an affront to justice if Manioso, a government Ee who had served for 36 years, is deprived of the benefits due him for work‐related ailments that resulted in his Permanent Total Disability. (Manioso v. GSIS, G.R. No. 148323, Apr. 29, 2005) Temporary Disability Benefits Q: When does temporary total disability arises? A: It accrues or arises when the impaired physical and/or mental faculties can be rehabilitated and/or restored to their normal functions. (Sec 2[t]) Q: What benefits are given for temporary disability? A: 1. Member is entitled to 75% of his current daily compensation for each day or fraction thereof of total disability benefit, th to start at the 4 day but not exceeding 120 days in one calendar year when:

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2.

a. He has exhausted all sick leaves b. CBA sick leave benefits Provided, that: i. He was in the service at time of disability; or ii. If separated, he has rendered at least 3 years of service and has paid at least 6 monthly contributions in the year preceding his disability The temporary total disability benefits shall in no case be less than P70 a day.

Note: A member cannot enjoy the temporary total disability benefit and sick leave pay simultaneously. An application for disability must be filed with the GSIS within 4 years from the date of the occurrence of the contingency.

Survivorship Benefits Q: Who are entitled to survivorship benefits? A: Upon the death of a member or pensioner, his beneficiaries shall be entitled to survivorship benefits. Such benefit shall consist of: 1. The basic survivorship pension which is 50% of the basic monthly pension; and 2. The dependent children’s pension not exceeding 50% of the basic monthly pension Q: Under what conditions are the primary beneficiaries entitled to the basic monthly pension? A: Upon the death of a member, the primary beneficiaries shall be entitled to: 1. Survivorship pension: Provided, That the deceased: a. was in the service at the time of his death; or b. if separated from the service, has rendered at least 3 years of service at the time of his death and has paid 36 monthly contributions within the five‐year period immediately preceding his death; or has paid a total of at least 180 monthly contributions prior to his death; or 2. The survivorship pension plus a cash payment equivalent to 100% of his average monthly compensation for every year of service: Provided, That the deceased was in the service at the time of


SOCIAL LEGISLATION his death with at least 3 years of service; OR 3. A cash payment equivalent to 100% of his average monthly compensation for each year of service he paid contributions, but not less than P12,000.00: Provided, That the deceased has rendered at least 3 years of service prior to his death but does not qualify for the benefits under item (1) or (2) of this paragraph. [Sec. 21 (a)] Q: After the end of the guaranteed 30 months, are the beneficiaries still entitled to any survivorship benefits? A: Yes. The survivorship pension shall be paid as follows: 1. When the dependent spouse is the only survivor, he/she shall receive the basic survivorship pension for life or until he or she remarries; 2. When only dependent children are the survivors, they shall be entitled to the basic survivorship pension for as long as they are qualified, plus the dependent children’s pension equivalent to 10% of the basic monthly pension for every dependent child not exceeding 5, counted from the youngest and without substitution; 3. When the survivors are the dependent spouse and the dependent children, the dependent spouse shall receive the basic survivorship pension for life or until he/she remarries, and the dependent children shall receive the dependent children’s pension. (Sec. 21[b]) Note: The dependent children shall be entitled to the survivorship pension as long as there are dependent children and, thereafter, the surviving spouse shall receive the basic survivorship pension for life or until he or she remarries.

Q: When are secondary beneficiaries entitled to survivorship benefits? A: In the absence of primary beneficiaries, the secondary beneficiaries shall be entitled to: 1. The cash payment equivalent to 100% of his average monthly compensation for each year of service he paid contributions, but not less than

2.

P12,000.00: Provided, That the member is in the service at the time of his death and has at least 3 years of service; or In the absence of secondary beneficiaries, the benefits under this par. shall be paid to his legal heirs. (Sec. 21[c])

Q: What are the benefits that the beneficiaries are entitled to upon the death of the pensioner? A: 1. Upon the death of an old‐age pensioner or a member receiving the monthly income benefit for permanent disability, the qualified beneficiaries shall be entitled to the survivorship pension defined in Sec. 20 of this Act, subject to the provisions of par. (b) of Sec.21. 2. When the pensioner dies within the period covered by the lump sum, the survivorship pension shall be paid only after the expiration of the said period. Q: Gary Leseng was employed as a public school teacher at the Marinduque High. On April 27, 1997, a memorandum was issued by the school principal designating Gary to prepare the model dam project, which will be the official entry of the school in the search for Outstanding Improvised Secondary Science Equipment for Teachers. Gary complied with his superior's instruction and took home the project to enable him to finish before the deadline. While working on the model dam project, he came to contact with a live wire and was electrocuted. The death certificate showed that he died of cardiac arrest due to accidental electrocution. Bella (Gary’s common‐law wife) and Jobo (his only son) filed a claim for death benefits with the GSIS which was denied on the ground that Gary’s death did not arise out of and in the course of employment and therefore not compensable because the accident occurred in his house and not in the school premises. Is Bella entitled to file a claim for death benefits with the GSIS? Why? A: The beneficiaries of a member of the GSIS are entitled to the benefits arising from the death of said member. Death benefits are called survivorship benefits under the GSIS Law. Not being a beneficiary, Bella is not entitled to receive survivorship benefits. She is not a beneficiary because she is a common‐law wife and not a legal dependent spouse. (1991 Bar Question) Q: Is the cause of death of Gary (cardiac arrest

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UST GOLDEN NOTES 2011 due to accidental electrocution in his house) compensable? Why? A: Yes. To be compensable under the GSIS Law, the death need not be work connected. Q: Abraham, a policeman, was on leave for a month. While resting in their house, he heard two of his neighbors fighting with each other. Abraham rushed to the scene intending to pacify the protagonists. However, he was shot to death by one of the protagonists. Eva Joy, a housemaid, was Abraham's surviving spouse whom he had abandoned for another woman years back. When she learned of Abraham's death, Eva Joy filed a claim with the GSIS for death benefits. However, her claim was denied because: (a) when Abraham was killed, he was on leave; and (b) she was not the dependent spouse of Abraham when he died. Resolve with reasons whether GSIS is correct in denying the claim. A: Yes, because under the law, a dependent is one who is a legitimate spouse living with the Ee. (Art. 167 [i], LC) In the problem given, Eva Joy had been abandoned by Abraham who was then living already with another woman at the time of his death. Moreover, Abraham was on leave when he was killed. The 24‐hour duty rule does not apply when the policeman is on vacation leave. (ECC v. CA, G.R. No. 121545, Nov. 14, 1996) Taking together jurisprudence and the pertinent guidelines of the ECC with respect to claims for death benefits, namely: 1. That the Ee must be at the place where his work requires him to be; 2. That the Ee must have been performing his official functions; and 3. That if the injury is sustained elsewhere, the Ee must have been executing an order for the Er, it is not difficult to understand then why Eva Joy's claim was denied by the GSIS. (Tancinco v. GSIS, G.R. No. 132916, Nov. 16, 2001) In the present case, Abraham was resting at his house when the incident happened; thus, he was not at the place where his work required him to be. Although at the time of his death Abraham was performing a police function, it cannot be said that his death occurred elsewhere other than the place where he was supposed to be because he was executing an order for his Er. (2005 Bar Question)

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Funeral Benefits Q: What comprises the funeral benefit? A: Cash not less than P12,000 to be increased to at least P18,000 after 5 years (specifically year 2002). The amount shall be determined and specified by the GSIS through an information circular distributed to all Ers for posting at their premises. (Sec. 23, par.1) Q: When will it be paid? A: Upon the death of: 1. An active member 2. A member who has been separated from the service but is entitled to future separation or retirement benefits 3. A member who is a pensioner (excluding survivorship pensioners) 4. A retiree who is at the time of his retirement was of pensionable age, at least 60 years old, who opted to retire under RA 1616 (An act further amending Sec.12, C.A. 186, as amended, by prescribing two other modes of retirement and for other purposes). Life Insurance Q: What are the classes of life insurance coverage? A: 1. Compulsory life insurance 2. Optional life insurance Note: The plans may be endowment or ordinary life.

Q: When does compulsory life insurance coverage take effect? A: All Ees including the members of the Judiciary and the Constitutional Commissioners except for Members of the AFP, the PNP, BFP and BJMP, shall, under such terms and conditions as may be promulgated by the GSIS, be compulsorily covered with life insurance, which shall automatically take effect as follows: 1. Those employed after the effectivity of this Act, their insurance shall take effect on the date of their employment; 2. For those whose insurance will mature after the effectivity of this Act, their insurance shall be deemed renewed on the day following the maturity or expiry date of their insurance;


SOCIAL LEGISLATION 3.

For those without any life insurance as of the effectivity of this Act, their insurance shall take effect following said effectivity.

Q: When may a member obtain optional life insurance coverage? A: 1. A member may at any time apply for himself and/or his dependents an insurance and/or pre‐need coverage embracing: a. Life b. Memorial plans c. Health d. Education e. Hospitalization f. Other plans as maybe designed by GSIS 2. Any employer may apply for group insurance coverage for its employees. Q: Where can GSIS loans be invested in? A: 1. In direct housing loans to members and group housing projects secured by first mortgage giving priority to the low income groups 2. In short and medium term loans to members such as salary, policy, educational, emergency stock purchase plan, and other similar loans Q: What is the prescriptive period to claim the benefits? A: GR: 4 Years from the date of contingency XPN: Life insurance and retirement (Sec. 28) Q: What is the process for the adjudication of claims and disputes regarding the GSIS benefits? A: The quasi‐judicial functions of the GSIS shall be vested in its Board of Trustees. 1. The GSIS, in appropriate cases, or any person whose rights are or may be prejudiced by the operations or enforcement of R.A. 8291 and other laws administered by the GSIS, may file a petition before the GSIS either personally or through counsel.

2.

3.

Within 15 days from receipt of the notice of decision or award, the aggrieved party may appeal the decision of the GSIS Board of Trustees to the CA. Appeal shall be taken by filling a verified petition for review with the CA. (Sec 1 to 5, Rule 43, Rules of Court) When no appeal is perfected and there is no order to stay by the Board, by the CA or by the SC, any decision or award of the Board shall be enforced and executed in the same manner as decisions of the RTC. Note: The social security benefits shall be exempt from attachment, garnishment, execution, levy or other processes issued by the courts, quasi‐judicial bodies or administrative agencies including the Commission on Audit, disallowances, and from all financial obligations of the members.

Q: May a member enjoy the benefits provided for in the Revised GSIS Act simultaneous with similar benefits provided under other laws for the same contingency? A: Whenever other laws provide similar benefits for the same contingencies covered by this Act, the member who qualifies to the benefits shall have the option to choose which benefits will be paid to him. However, if the benefits provided by the law chosen are less than the benefits provided under this Act, the GSIS shall pay only the difference. (Sec. 55) d.Beneficiaries Q: Who are the considered beneficiaries? A: 1. Primary beneficiaries a. The legal dependent spouse until he/she remarries and b. The dependent children. (Sec. 2[g]) 2. Secondary beneficiaries a. The dependent parents and b. Subject to the restrictions on dependent children, the legitimate descendants. (Sec. 2[h]) Q: Who are considered dependents? A: 1. Legitimate spouse dependent for support upon the member or pensioner; 2. Legitimate, legitimated, legally adopted child, including the illegitimate child, a. who is unmarried,

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UST GOLDEN NOTES 2011 b. c.

3.

not gainfully employed, not over the age of majority, or if over the age of majority, incapacitated and incapable of self‐ support due to a mental or physical defect acquired prior to age of majority; and Parents dependent upon the member for support. (Sec. 2[f])

3.LIMITED PORTABILITY LAW (RA 7699) Q: What is the Limited Portability Rule? A: A covered worker who transfers employment from one sector to another or is employed on both sectors, shall have creditable services or contributions on both Systems credited to his service or contribution record in each of the Systems and shall be totalized for purposes of old‐ age, disability, survivorship, and other benefits in either or both Systems. (Sec. 3) All contributions paid by such member personally, and those that were paid by his employers to both Systems shall be considered in the processing of benefits which he can claim from either or both Systems. (Sec. 4) Q: How are the "portability" provisions of R.A. No. 7699 beneficial or advantageous to SSS and GSIS members in terms of their creditable employment services in the private sector or the government, as the case may be, for purposes of death, disability or retirement? A: Portability provisions of R.A. No. 7699 shall benefit a covered worker whose creditable services or contributions in both systems credited to his service or contribution record in each of the system and shall be totalized for purposes of old‐ age, disability, survivorship and other benefits. (Sec. 3) The "portability" provisions of R.A. 7699 allow the transfer of funds for the account and benefit of the worker who transfers from one system to another. This is advantageous to the SSS and GSIS members for purposes of death, disability or retirement benefits. In the event the employees transfer from the private sector to the public sector, or vice‐versa, their creditable employment services and contributions are carried over and transferred as well. (2005 Bar Question)

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4.EMPLOYEES’S COMPENSATION Q: Discuss briefly the Employee’s Compensation Program (ECP). A: It is the program provided for in Article 166 to 208 of the Labor Code whereby a fund known as the State Insurance Fund (SIF) is established through premium payments exacted from Ers and from which the Ees and their dependents in the event of work‐connected disability or death, may promptly secure adequate income benefit, and medical or related benefits. Coverage Q: Who are subject to coverage under the ECP? A: Ers and their Ees not over sixty (60) years of age are subject to compulsory coverage under this program. The Er may belong to either the: 1. Public sector covered by the GSIS, comprising the National Government, including GOCCs, Philippine Tuberculoses Society, the Philippine National Red Cros, and the Philippine Veterans Bank; and 2. Private sector covered by the SSS, comprising all Ers other than those defined in the immediately preceding paragraph. The Ee may belong to either the: 1. Public sector comprising the employed workers who are covered by the GSIS, including the members of the AFP, elective officials who are receiving regular salary and any person employed as casual emergency, temporary, substitute or contractual; 2. Private sector comprising the employed workers who are covered by the SSS. Q: When does compulsory coverage take effect? A: 1. Employer – on the first day of operation 2. Employee – on the day of his employment Q: What is an Occupational Disease? A: One which results from the nature of the employment, and by nature is meant conditions which all Ees of a class are subject and which produce the disease as a natural incident of a particular occupation, and attach to that


SOCIAL LEGISLATION occupation a hazard which distinguishes it from the usual run of occupations and is in excess of the hazard attending the employment in general To be occupational, the disease must be one wholly due to causes and conditions which are normal and constantly present and characteristic of the particular occupation. Q: What is Sickness? A: It means any illness definitely accepted as an occupational disease listed by the Commission or any illness caused by employment, subject to proof that the risk of contracting the same is increased by working conditions (Art. 167(l), LC). Q: Discuss briefly the theory of Increased Risk. A: The term “sickness” as defined in Article 167(l) of the Labor Code is a recognition of the theory of increased risk. To establish compensability under the same, the claimant must show substantial proof of work‐connection, but what is required is merely a reasonable work‐connection and not a direct causal relation. Proof of actual cause of the ailment is not necessary. The test of evidence of relation of the disease with the employment is probability and not certainty. (Jimenez v. Employees’ Compensation Commission, G.R. No. L‐58176, March 23, 1984; Panotes vs. ECC, G.R. No. L‐64802, March 29, 1984) Q: May an illness not listed by the Employees Compensation Commission as an occupational disease be compensable? A: Where the illness is not listed by the Employees Compensation Commission as an occupational disease, it must be established that the risk of contracting the same is increased by working conditions. Q: What defenses may be interposed by the State Insurance Fund (SIF) against a claim for compensation made by a covered Ee or his dependents? A: The following defenses may be set up: 1. Injury is not work‐connected or the sickness is not occupational 2. Disability or death was occasioned by the Ee’s intoxication, wilful intention to injure or kill himself or another, or his notorious negligence (Art. 172, LC) 3. No notice of sickness, injury or death was given to the Er (Art. 206, LC)

4.

Claim was filed beyond three (3) years from the time the cause of action accrued (Art. 201, LC, as amended by P.D. 1921)

Note: Notorious negligence is equivalent to gross negligence; it is something more than mere carelessness or lack of foresight.

Q: Abraham Dino works as a delivery man in a construction supply establishment owned by Abraham Julius. One day, while Dino was making reports on his delivery, he had an altercation with Julius; irked by the disrespectful attitude of Dino, Julius pulled out his gun and shot Dino, hitting him in the spinal column and paralyzing him completely. Julius was prosecuted for the act. 1. Is the disability suffered by Abraham Dino compensable? 2. If Abraham Dino recovers compensation from the SIF, can he still recover from Abraham Julius damages in the criminal case? Why? A: 1. Yes. The injury was sustained by Abraham Dino in his place of work and while in the performance of his official functions. 2. No. Under Article 173 of the Labor Code, as amended by P.D. 1921, the liability of the State Insurance Fund under the Employee’s Compensation Program shall be exclusive and in place of all other liabilities of the Er to the Ee or his dependents or anyone otherwise entitled to recover damages on behalf of the Ee or his dependents. Q: Socrates Benjie, a truck driver employed by a local construction company, was injured in an accident while on assignment in one of his employer’s project in Iraq. Considering that his injury was sustained in a foreign country, is Socrates Benjie entitled to benefits under the ECP? A: Yes. Filipinos working abroad in the service of an Er, domestic or foreign, who carries on in the Philippines any trade, business, industry, undertaking or activity of any kind, are covered by the ECP. (Rule 1, Section 5, ECC Rules; Art.169, LC) Q: What is the “Going and Coming Rule”? Is this rule absolute? A: GR: In the absence of special circumstances, an Ee injured while going to or coming from his place of work is excluded from the benefits of Workmen’s Compensation Act. XPNS:

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UST GOLDEN NOTES 2011 1. 2.

3.

4.

Where the Ee is proceeding to or from his work on the premises of the Er; Proximity Rule—where the Ee is about to enter or about to leave the premises of his Er by way of exclusive or customary means of ingress and egress; Ee is charged, while on his way to or from his place of employment or at his home, or during this employment with some duty or special errand connected with his employment; and Where the Er as an incident of the employment provides the means of transportation to and from the place of employment.

Q: Who are entitled to benefits under the ECP? A: The covered Ee, his dependents, and in case of his death, his beneficiaries. Q: Who are the dependents of the Ee? A: 1. Legitimate, legitimated, legally adopted or acknowledged natural child who is unmarried, not gainfully employed, and not over twenty‐one (21) years of age or over twenty‐one (21) years of age provided he is incapacitated and incapable of self‐support due to a physical or mental defect which is congenital or acquired during minority; 2. Legitimate spouse living with the Ee; and 3. Parents of said Ee wholly dependent upon him for regular support. (Art.167(i), LC, as amended by P.D. 1921) Q: Who are included in the term beneficiaries? A: "Beneficiaries" means the dependent spouse until he remarries and dependent children, who are the primary beneficiaries. In their absence, the dependent parents and subject to the restrictions imposed on dependent children, the illegitimate children and legitimate descendants who are the secondary beneficiaries; Provided, that the dependent acknowledged natural child shall be considered as a primary beneficiary when there are no other dependent children who are qualified and eligible for monthly income benefit. (Art. 167, LC, as amended by Sec. I, P.D. 1921) Q: What are the benefits which may be enjoyed under the SIF? A: 1. Medical Benefits

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2. 3. 4.

Disability Benefits Death Benefits Funeral Benefits

Medical Benefit Q: What are the conditions of entitlement to Medical Services? A: For an Ee to be entitled to medical services, the following conditions must be satisfied: 1. He has been duly reported to the System (SSS or GSIS); 2. He sustains a permanent disability as a result of an injury or sickness; and 3. The System has been notified of the injury or sickness which caused his disability. Disability Benefit Q: What are disability benefits? A: They are income benefits in case of temporary total disability, permanent total disability and permanent partial disability Q: What are the disabilities that are considered total and permanent? A: The following disabilities shall be deemed total and permanent: 1. Temporary total disability lasting continuously for more than one hundred twenty days, except as otherwise provided for in the Rules; 3. Complete loss of sight of both eyes; 4. Loss of two limbs at or above the ankle or wrist; 5. Permanent complete paralysis of two limbs; 6. Brain injury resulting in incurable imbecility or insanity; and 7. Such cases as determined by the Medical Director of the System and approved by the Commission. (Art.192(c), LC) Q: May a permanent partial disability be converted to permanent total disability after the Ee’s retirement? Why? A: Yes. This is in line with the social justice provision in the Constitution. A person’s disability may not manifest itself fully at one precise moment in time but rather over a period of time. And disability should not be understood more on its medical significance but on the loss of earning capacity.


SOCIAL LEGISLATION Q: May permanent total disability arise although the Ees does not lose the use of any part of his body? A: Yes. Where the Ee is unable, by reason of the injury or sickness, to perform his customary job for more than 120 days, permanent total disability arises. (Ijares vs. CA, G.R. No. 105854, August 26, 1999) Death Benefit Q: What are the conditions for entitlement to death benefits? A: The beneficiaries of a deceased Ee shall be entitled to an income benefit if all of the following conditions are satisfied: 1. The Ee has been duly reported to the System; 2. He died as a result of an injury or sickness; and 3. The System has been duly notified of his death, as well as the injury or sickness which caused his death. Q: For how long are the primary beneficiaries entitled to the death benefits? A: 1. Dependent Spouse—until he or she remarries. 2. Dependent Children—until they get married, or find gainful employment, or reach twenty‐one (21) years of age. 3. Dependent Child suffering from physical or mental defect—until such defect disappears. Q: If an Ee suffers disability or dies before he is duly reported for coverage to the System (SSS or GSIS), who will be liable for the benefits? A: The Er (Sec.1, Rule X; Sec.1, Rule XI; Sec. 1, Rule XII; Sec. 1, Rule XIII; ECC Rules ) Funeral Benefit Q: What is the funeral benefit? A: A funeral benefit of P10, 000.00 shall be paid upon the death of a covered Ee or permanently totally disabled pensioner. Q: When is an Er liable to pay a penalty to the State Insurance Fund (SIF)?

A: In case the employee's injury or death was due to the failure of the employer to comply with any law, or to install and maintain safety devices, or take other precautions for the prevention of injury, said employer shall pay to the State Insurance Fund a penalty of twenty‐five percent of the lump sum equivalent of the income benefit payable by the System to the employee. All employers, especially those who should have been paying a rate of contribution higher than required of them under this Title, are enjoined to undertake and strengthen measures for the occupational health and safety of their employee. (Art.200, LC) Q: Who are required to make contributions to the SIF? A: Contributions under this Title shall be paid in their entirety by the employer and any contract or device for the deduction of any portion thereof from the wages or salaries of the employees shall be null and void. (Art.183(c), LC) The Republic of the Philippines guarantees the benefits prescribed under this Title, and accepts general responsibility for the solvency of the State Insurance Fund. In case of any deficiency, the same shall be covered by supplemental appropriation from the national government. (Art.184, LC) Q: When does the right to compensation or benefit for loss or impairment of an Ee’s earning capacity due to work‐related illness or injury arise? A: It arises or accrues upon, and not before, the happening of the contingency. Hence, an Ee acquires no vested right to a program of compensation benefits simply because it was operative at the time he became employed. (San Miguel Corporation vs. NLRC, G.R. No. 57473, August 15, 1988) Q: Does recovery from the SIF bar a claim for benefits under the SSS Law? Why? A: No, as expressly provided for in Article 173 of the Labor Code, payment of compensation under the SIF shall not bar the recovery of benefits under the SSS Law, Republic Act No. 1161, as amended. Benefits under the SIF accrue to the Ees concerned due to hazards involved and are made a burden on the employment itself. On the other hand, social security benefits are paid to SSS members by reason of their membership therein for which they contribute their money to a general fund. (Maao Sugar Central Co., Inc. vs. CA, G.R. No. 83491, August 27, 1990)

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UST GOLDEN NOTES 2011 G.LABOR RELATIONS LAW

4.

1.RIGHT TO SELF ORGANIZATION

5. a.Who may unionize for purposes of collective bargaining

Q: What is the extent of the right to self‐ organization? A: It includes the right: 1. To form, join and assist labor organizations for the purpose of collective bargaining (CB) through representatives of their own choosing; and 2. To engage in lawful and concerted activities for the purpose of CB or for their mutual aid and protection. (Art. 246) Q: Who are the persons/Ee’s eligible to join a labor organization (LO) for purposes of CB? A: The entities covered are all persons employed in: 1. Commercial industrial, and agricultural enterprises; and 2. In religious, charitable, medical or educational institutions whether operating for profit or not. (Art. 243) Q: Who are the persons/Ee’s eligible to join a labor organization for mutual aid and protection? A: The following enjoy the right to self‐organization for mutual aid and protection: 1. Ambulant workers 2. Intermittent workers 3. Itinerant workers 4. Self‐employed people 5. Rural workers 6. Those without and definite Er’s. (Art. 243) Q: Who are the persons/Ee’s not granted the right to self‐organization: A: 1. High level or Managerial Government Ee’s. (Sec. 3, E.O. 180) 2. Ee’s of International organizations with immunities. (ICMC v. Calleja, G.R. No. 85750, Sep. 28, 1990) 3. Managerial Employees. (Art. 212 of LC)

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6.

7. 8.

9.

Members of the AFP including the police officers, policemen, firemen, and jail guards. (Sec. 4, E.O. 180) Confidential Employees. (Metrolab Industries Inc. v. Confesor, G.R. No. 108855, Feb. 28, 1996) Employees of cooperatives who are its members. (Benguet Elec. Coop. v. Ferrer‐ Calleja, G.R. No. 79025, Dec. 29, 1989); However they may form worker’s association. (NEECO Ee’s Assoc. v. NLRC, G.R. No. 16066, Jan. 24, 2000) Non‐Ee’s. (Rosario Bros. v. Ople, G.R. No. L‐5390, July 31, 1984) Gov’t Ee’s, including GOCC’s with original charters. (Arizala v. CA, G.R. Nos. 43633‐ 34, Sep. 14, 1990) Aliens without a valid working permit or aliens with working permits but are nationals of a country which do not allow Filipinos to exercise their right of self‐ organization and to join or assist labor organizations. (Art. 269 of LC; D.O. No. 9 [1997], Rule II, Sec. 2)

b.Bargaining Unit Q: What is a bargaining unit? A: It is a group of Ee’s of a given Er, comprised of all or less than all of the entire body of the Ee’s which the collective interest of all the Ee’s consistent with equity to the employer, indicate to be best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law. Q: What is an appropriate bargaining unit? A: 1. A group of employees (Ees) 2. Of a given employer 3. Comprised of all or less than all of the entire body of Ees 4. Which the collective interest of all the Ees consistent with equity to the Er 5. Indicate to be best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law. (1)Test to determine the constituency of an appropriate bargaining unit Q: What are the factors considered in determining the appropriateness of a bargaining unit? A: 1. Will of the Ees. (Globe Doctrine)


LABOR RELATIONS LAW 2.

3. 4.

Affinity and unity of the Ees interest, such as substantial similarity of work and duties, or similarity of compensation and working conditions. (Substantial Mutual Interest Rule) Prior collective bargaining history Similarity of employment status. (SMC v. Laguesma, G.R. No. 100485, Sep. 21, 1994)

Q: What are the factors considered in determining the substantial mutual interest doctrine? A: 1. Similarity in the scale and manner of determining earnings 2. Similarity in employment benefits, hours of work, and other terms and conditions of employment 3. Similarity in the kinds of work performed 4. Similarity in the qualifications, skills and training of Ees 5. Frequency of contract or interchange among the Ees 6. Geographical proximity 7. Continuity and integration of production processes 8. Common supervision and determination of labor‐relations policy 9. History of CB 10. Desires of the affected Ees or 11. Extent of union organization Q: A registered labor union in UP, ONAPUP, filed a petition for certification election (PCE) among the non‐academic Ees. The university did not oppose, however, another labor union, the All UP Workers Union assents that it represents both academic and non‐academic personnel and seeks to unite all workers in 1 union. Do Ees performing academic functions need to comprise a bargaining unit distinct from that of the non‐academic Ees? A: Yes. The mutuality of interest test should be taken into consideration. There are two classes of rank and file Ees in the university that is, those who perform academic functions such as the professors and instructors, and those whose function are non‐ academic who are the janitors, messengers, clerks etc. Thus, not much reflection is needed to perceive that the mutuality of interest which justifies the formation of a single bargaining unit is lacking between the two classes of Ees. (U.P. v. Ferrer‐ Calleja, G.R. No.96189, July 14, 1992) Q: Is the bargaining history a decisive factor in the determination of appropriateness of bargaining unit?

A: No. While the existence of a bargaining history is a factor that may be reckoned with in determining the appropriate bargaining unit, the same is not decisive or conclusive. Other factors must be considered. The test of grouping is community or mutuality of interests. This is so because the basic test of an asserted bargaining unit’s acceptability is whether or not it is fundamentally the combination which will best assure to all Ees the exercise of their CB rights. (Democratic Labor Ass’n v. Cebu Stevedoring Company, Inc., G.R. No. L‐10321, Feb. 28, 1958) Q: What is “one‐union, one‐company” policy?

A: GR: It is the proliferation of unions in an Er unit. Such is discouraged as a matter of policy unless there are compelling reasons which would deny a certain class of Ees to the right to self‐ organization for purposes of collective bargaining (CB). XPNs: 1. Supervisory Ees who are allowed to form their own unions apart from the rank‐ and‐file Ees and 2. The policy should yield to the right of Ees to form union for purposes not contrary to law, self‐organization and to enter into CB negotiations. Note: Two companies cannot be treated into a single bargaining unit even if their businesses are related. Subsidiaries or corporations formed out of former divisions of a mother company following a re‐ organization may constitute a separate bargaining unit.

Q: Union filed a PCE among the rank and file Ees of three security agencies including the Veterans Security. The latter opposed alleging that the three security agencies have separate and distinct corporate personalities. May a single PCE filed by a labor union in the three corporations instead of filing 3 separate petitions? A: Yes. The following are indications that the 3 agencies do not exist and operate separately and distinctly from each other with different corporate direction and goals: 1) Veterans Security failed to rebut the fact that they are managed through the Utilities Management Corp with all their Ees drawing their salaries and wages from the said entity; 2) that the agencies have common and interlocking incorporators and officers; 3) that they have a single mutual benefit system and followed a single system of compulsory retirement. 4) they could easily transfer security guards of one agency

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UST GOLDEN NOTES 2011 to another and back again by simply filling‐up a common pro‐forma slip; 5) they always hold joint yearly ceremonies such as the PGA Annual Awards Ceremony; and 6) they continue to be represented by one counsel. Hence, the veil of corporate fiction of the 3 agencies should be lifted for the purpose of allowing the Ees of the 3 agencies to form single union. As a single bargaining unit, the Ees need not file 3 separate PCE. (Philippine Scout Veterans Security and Investigation Agency v. SLE, G.R. No. 92357, July 21, 1993)

through the Labor Relations Division shall, within 10 days from receipt of the notice, record the fact of VR in its roster of legitimate labor unions and notify the labor union concerned.

Q: What are the three (3) conditions to voluntary recognition (VR)? A: VR requires 3 concurrent conditions: 1.

2.

(2)Voluntary Recognition Q: What are the 3 methods of determining the bargaining representative? A: 1. 2.

Voluntary recognition Certification election with or without run‐ off Consent election

3.

3. Q: What is voluntary recognition (VR)?

A: The process by which a legitimate labor union is recognized by the employer (Er) as the exclusive bargaining representative or agent in a bargaining unit, reported with the Regional Office. (Sec. 1 [bbb], Rule I, Book V, IRR)

VR is possible only in an unorganized establishment. Only one union must ask for recognition. If there 2 or more unions asking to be recognized, the Er cannot recognize any of them; the rivalry must be resolved through an election. The union voluntarily recognized should be the majority union as indicated by the fact that members of the bargaining unit did not object to the projected recognition. If no objection is raised, the recognition will proceed, the DOLE will be informed and CBA recognition will commence. If objection is raised, the recognition is barred and a certification election or consent election will have to take place.

Q: What are the requirements for VR? A: The notice of VR shall be accompanied by the original copy and 2 duplicate copies of the following req’ts: 1. 2.

3.

Joint statement under oath of VR Certificate of posting of joint statement for 15 consecutive days in at least 2 conspicuous places in the establishment of the bargaining unit Certificate of posting

4.

Approximate number of Ees in the bargaining unit and the names of those who supported the recognition

5.

Statement that the labor union is the only LLO operating within the bargaining unit.

Note: Where the notice of voluntary recognition is sufficient in form, number and substance and where there is no registered labor union operating within the bargaining unit concerned, the Regional Office,

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Note: In an organized establishment, voluntary recognition is not possible. A petition to hold a CE has to be filed within the freedom period which means the last 60 days of the 5th year of the expiring CBA. The petition may be filed by any Legitimate Labor Organization (LLO), but the petition must have written support of at least 25% of the Ees in the bargaining unit.

Q: Where and when to file the petition for VR? A: Within 30 days from such recognition, Er shall submit a notice of VR with the Regional Office which issued the recognized labor union’s certificate of registration or certificate of creation of a chartered local. Q: What are the effects of recording of fact of voluntary recognition (VR)? A: 1.

2.

The recognized labor union shall enjoy the rights, privileges and obligations of an existing bargaining agent of all the employees (Ees) in the bargaining unit. It shall also bar the filing of a petition for certification election by any labor


LABOR RELATIONS LAW organization for a period of 1 year from the date of entry of VR. (3)Certification Election Q: What is certification election (CE)?

Note: Some of the Ees may not want to have a union; hence, “no union” is one of the choices named in the ballot. If “no union” wins, the company or the bargaining unit remains un‐unionized for at least 12 months, the period is known as 12‐month bar. After that period, a petition for a CE may be filed again.

A: It is the process of determining through secret ballot the sole and exclusive representative of the Ees in an appropriate bargaining unit, for purposes of CB or negotiation. (Sec. 1 [h], Rule I, Book V, IRR)

Q: Distinguish the requisites for a petition for certification election between an organized and an unorganized establishment.

Note: The process is called CE because it serves as the official, reliable and democratic basis for the BLR to determine and certify the union that shall be the exclusive bargaining representative of the Ees for the purpose of bargaining with the Er.

Art.256. ORGANIZED Art.257. UNORGANIZED Bargaining agent Present None Petition filed Has to be a verified No need to be verified petition Freedom Period No petition for CE except Not applicable. No within 60 days before the freedom period. Petition expiration of the CBA. can be filed anytime. (See Art. 253 & 253‐A) Substantial support rule Must be duly supported No substantial support by 25% of all the rule. members of the appropriate bargaining Why? Intention of law is unit (ABU). to bring in the union, to implement policy behind Percentage base: all Art. 211(a). members of an ABU.

Q: What is the nature of certification election? A: A certification election is not a litigation but merely an investigation of a non‐adversarial fact‐ finding character in which BLR plays a part of a disinterested investigator seeking merely to ascertain the desire of the employees as to the matter of their representation. (Airline Pilots Ass’n of the Philippines v. CIR, G.R. No. L‐33705, April 15, 1977) Q: What is the purpose of a certification election? A: It is a means of determining the worker’s choice of: 1. Whether they want a union to represent them for collective bargaining or if they want no union to represent them at all. 2. And if they choose to have a union to represent them, they will choose which among the contending unions will be the sole and exclusive bargaining representative of the employees in the appropriate bargaining unit. Q: What are the issues involved in a certification proceeding? A: Certification proceedings directly involve two issues: 1. 2.

Proper composition and constituency of the bargaining unit; and The veracity of majority membership claims of the competing unions so as to identity the one union that will serve as the bargaining representative of the entire bargaining unit.

A:

Note: The approval of the PCE in an unorganized bargaining unit is NEVER appealable, the reason being that the law wants the ununionized to be unionized.

Q: Should the consent signatures of at least 25% of the Ees in the bargaining unit be submitted simultaneously with the filing of the petition for certification election (PCE)? A: No, the administrative rule requiring the simultaneous submission of the 25% consent signatures upon the filing of PCE should not be strictly applied to frustrate the determination of the legitimate representative of the workers. Accordingly, the Court held that the mere filing of a PCE within the freedom period is sufficient basis for the issuance of an order for the holding of a CE, subject to the submission of the consent signatures within a reasonable period from such filing. (Port Workers Union of the Phils. v. Laguesma, G.R. Nos. 94929‐30, Mar. 18, 1992) Q: Who may file a petition for certification election (PCE)? A: 1. Any legitimate labor organization (LLO)

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3. 4.

A national union or federation which has already issued a charter certificate to its local chapter participating in the CE A local chapter which has been issued a charter certificate An Er only when requested to bargain collectively in a bargaining unit where no registered CBA exists. (Sec. 1, Rule VIII, Book V, IRR as amended by D.O. 40‐F‐03)

Note: A national union or federation filing a petition in behalf of its local/chapter shall not be required to disclose the names of the local/chapter’s officers and members, but shall attach to the petition the charter certificate it issued to its local/chapter. (Sec. 1, Rule VIII, Book V, IRR as amended by D.O. 40‐F‐03)

Q: May an employee intervene in the petition for certification election (PCE)? A: Yes, for the purpose of protecting his individual right. (Sec. 1, Rule VIII, Book V, IRR as amended by D.O. 40‐03) Q: Where is PCE filed? A: It shall be filed with the Regional Office which issued the petitioning union's certificate of registration/certificate of creation of chartered local. (Implementing Rules, as amended by D.O. 40‐ 03) Q: Who shall hear and resolve the PCE? A: The Mediator‐Arbiter. Q: When to file PCE? A: The proper time to file the PCE depends on whether the Certified Bargaining Unit has a CBA or not: 1. If it has no CBA, the petition may be filed anytime outside the 12‐month bar (certification year). 2. If it has CBA, it can be filed only within the th last 60 days of the 5 year of the CBA. Note: At the expiration of the freedom period, the Er shall continue to recognize the majority status of the incumbent bargaining agent where no PCE is filed.

Q: Distinguish union election from certification election. A: UNION ELECTION Held pursuant to the union’s constitution and

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CERTIFICATION ELECTION The process is ordered and supervised by DOLE

by‐laws Right to vote is enjoyed only by union members

Winners of union election become officers and representatives of the union only

All Ees whether union or non‐union members who belong to the appropriate bargaining unit can vote The winner in a CE is an entity, a union, which becomes the representative of the whole bargaining unit that includes even the members of the defeated unions.

Note: Both in CE and union election, the prescribed procedures should be followed.

Q: Can a "no‐union" win in a certification Election (CE)? A: Yes. Because the objective in a CE is to ascertain the majority representation of the bargaining representative, if the Ee’s desire to be represented at all by anyone. Hence, no union is one of the choices in a CE. (2006 Bar Question) Alternative Answer: No. A no union cannot win in a CE. The purpose of a CE is to select an excusive bargaining agent and a no union vote would precisely mean that the voter is not choosing any of the contending unions. If the no‐union votes constitute a majority of the valid votes cast, this fact will all the more mean that no union won in CE. A one‐year bar will consequently stop the holding of another CE to allow the Er to enjoy industrial peace for at least one year. Q: In what instance may a PCE be filed outside the freedom period of a current CBA? A: As a general rule, in an establishment where there is a CBA in force and effect, a PCE may be filed only during the freedom period of such CBA. But to have that effect, the CBA should have been filed and registered with the DOLE. (Art. 231, 253‐A and 256, LC). (1997 Bar Question) Thus, a CBA that has not been filed and registered with the DOLE cannot be a bar to a CE and such election can be held outside the freedom period of such CBA. Alternative Answer: A PCE may be filed outside the freedom period of a current CBA if such CBA is a new CBA that has been prematurely entered into, meaning, it was entered into before the expiry date of the old CBA. The filing of the PCE shall be within the


LABOR RELATIONS LAW freedom period of the old CBA which is outside the freedom period of the new CBA that had been prematurely entered into. Q: Are probationary employees (Ees) entitled to vote in a CE? Why? A: Yes, in a CE, all rank‐and‐file Ees in the appropriate bargaining unit (ABU) are entitled to vote. This principle is clearly stated in Art. 255 of the LC which states that the "labor organization designated or selected by the majority of the Ees in such unit shall be the exclusive representative of the Ees in such unit for the purpose of collective bargaining (CB)." CB covers all aspects of the employment relation and the resultant CBA negotiated by the certified union binds all Ees in the bargaining unit. Hence, all rank‐ and‐file Ees, probationary or permanent, have a substantial interest in the selection of the bargaining representative. The LC makes no distinction as to their employment status as basis for eligibility to vote in the petition for CE. The law refers to "all" the Ees in the bargaining unit. All they need to be eligible to vote is to belong to the "bargaining unit" (Airtime Specialists, Inc. v. Ferrer‐Calleja, G.R. No. 80612‐16, Dec. 29, 1989). (1999 Bar Question)

A: Yes, it is now well‐settled that Ees who have been improperly laid off but who have at present an unabandoned right to or expectation of re‐ employment, are eligible to vote in CE’s. Thus, and to repeat, if the dismissal is under question, as in the case now at bar whereby a case of illegal dismissal and/or ULP was filed, the Ee’s concerned could still qualify to vote in the elections. (Phil. Fruits & Vegetables Industries v. Torres, G.R. No. 92391, July 3, 1992) Q: Is direct certification (DC) still allowed? A: No. Even in a case where a union has filed a petition for CE, the mere fact that there was no opposition does not warrant a DC. More so in a case when the required proof is not presented in an appropriate proceeding and the basis of the DC is the union’s self‐serving assertion that it enjoys the support of the majority of the Ees, without subjecting such assertion to the test of competing claims. (Samahang Manggagawa sa Permex v. Secretary, G.R. No. 107792, Mar. 2, 1998) Q: What are the grounds for denying the PCE? A: 1.

Q: What is direct certification? A: It is the process whereby the Med‐Arbiter directly certifies a labor organization of an appropriate bargaining unit (ABU) of a company after a showing that such petition is supported by at least a majority of the Ees in the bargaining unit.

2.

3.

Q: Does the failure of SAMAFIL (an independent union) to prove its affiliation with NAFLU‐KMU federation affect its right to file a PCE as an independent union? A: No, as a LLO, it has the right to file a PCE on its own beyond question. Its failure to prove its affiliation with the NAFLU‐KMU cannot affect its right to file said PCE as an independent union. At the most, its failure will result in an ineffective affiliation with NAFLU‐KMU. Despite affiliation, the local union remains the basic unit free to serve the common interest of all its members and pursue its own interests independently of the federation. (Samahan ng mga Manggagawa sa Filsystems v. SLE, G.R. No. 128067, June 5, 1998) Q: May illegally dismissed Ees of the company participate in the certification election (CE)?

4.

5.

6.

The petitioning union or federation is not listed in the DOLE’s registry of legitimate labor unions or that its registration certificate legal personality has been revoked or cancelled with finality Failure of a local chapter or national union/federation to submit a duly issued charter certificate upon filing of the petition The petition was filed before or after the FREEDOM PERIOD of a duly registered CBA; provided that the 60‐day period based on the original CBA shall not be affected by any amendment, extension or renewal of the CBA; (contract bar rule) The petition was filed within 1 year from entry of voluntary recognition or within the same period from a valid certification, consent or run‐off election and no appeal on the results of the certification, consent or run‐off election is pending; (12‐month bar; certification year bar rule) A duly certified union has commenced and sustained negotiations with the Er in accordance with Art. 250 of the LC within the 1‐year period. (negotiation bar rule) There exists a bargaining deadlock which had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout to which an incumbent or certified bargaining agent is a party. (deadlock bar rule)

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In case of an organized establishment, failure to submit the 25% support req’t for the filing of the PCE. 8. Non‐appearance of the petitioner for 2 consecutive scheduled conferences before the med‐arbiter despite due notice, and 9. Absence of Er‐Ee relationship between all the members of the petitioning union and the owner of the establishment where the proposed bargaining unit is sought to be represented. (Sec.14[a], Rule VIII, Book V, IRR, as amended by D.O. 40‐F‐03) Q: What is a prohibited ground for the denial/suspension of the petition for certification election? A: The inclusion as union members of Ees outside the bargaining unit. Said Ees are automatically deemed removed from the list of membership of said unions. Q: Does the filing of a petition to cancel the petitioner’s registration cause the suspension or dismissal of the petition for certification election? A: No. To serve as a ground for dismissal of a PCE, the legal personality of the petitioner should have been revoked or cancelled “with finality”. Q: UNIDAD, a labor organization claiming to represent the majority of the rank and file workers of BAGSAK Toyo Manufacturing Corp. (BMTC), filed a petition for CE during the freedom period obtaining in said corp. Despite the opposition thereto by SIGAW Federation on the ground that UNIDAD was not possessed with all the attributes of a duly registered union, the Med‐Arbiter issued an order calling for a CE on July 25, 2001. This order was promulgated and served on the parties on July 12, 2001. On July 14, 2001, UNIDAD submitted and served the required documents for its registration as an independent union, which documents were approved by the DOLE on July 15, 2001. During the elections, UNIDAD won over SIGAW. SIGAW questioned UNIDAD's victory on the ground that UNIDAD was not a duly registered union when it filed the petition for a CE. Shall SIGAW’s case prosper or not? Why? A: No, SIGAW's case will not prosper. The application of technicalities of procedural req’ts in CE disputes will serve no lawful objective or purpose. It is a statutory policy that no obstacles should be placed on the holding of a CE, (Samahang

134

ng Manggagawa sa Pacific Plastic vs. Laguesma, G.R. No. 111245, Jan. 31, 1997) and that the law is indisputably partial to the holding of a CE. (Western Agusan vs. Trajano G.R. No. 65833, May 6, 1991) At any rate, UNIDAD completed all the req’ts for union registration on July 14, 2001, and legitimate union status was accorded on July 15, 2000, or at least 10 days before the scheduled date for holding the CE. (2001 Bar Question) Q: What is meant by “contract‐bar rule”? A: Contract‐bar rule means that while a valid and registered CBA is subsisting, the BLR is not allowed to hold an election contesting the majority status of the incumbent union except during the 60‐day period immediately prior to its expiration, which period is called the freedom period. Note: In the absence of such timely notice or filing of petition, the contract executed during the automatic renewal period is a bar to CE. There shall be no amendment, alteration, or termination of any of the provisions of the CBA except to give notice of one party’s intention to amend, alter and terminate the provisions within the freedom period.

Q: What are the requirements in order to invoke the contract bar rule? A: The existing CBA must: 1. 2. 3. 4. 5. 6. 7.

Be in writing and signed by all contracting parties Contain the terms and conditions of employment Cover employees in an appropriate bargaining unit Be for a reasonable period or duration Be ratified Be registered with the BLR; and The violation of the contract bar rule or the existence of a duly registered CBA must be specially pleaded as a defense.

Q: What is the effect of an invalid or unregistered CBA? A: There is no bar and therefore a certification election may be held. Note: Registration of CBA only puts into effect the contract‐bar rule but the CBA itself is valid and binding even if unregistered.

Q: What are the exceptions to the contract bar rule?


LABOR RELATIONS LAW A: 1. 2. 3.

The CBA is unregistered The CBA is inadequate and incomplete The CBA was hastily entered into (Doctrine of premature extension) 4. Withdrawal of affiliation from the contracting union brought about by schism or mass disaffiliation 5. Contract where the identity of the representative is in doubt. (ALU v. Ferrer Calleja, G.R. No. 85085, Nov. 6, 1989) 6. CBA entered into between the Er and the union during the pendency of a petition for CE (Vassar Industries Ees Union v. Estrella, G.R. No. L‐46562, Mar. 31, 1978) 7. CBA conducted between the Er and the union is not bar to a certification election filed by another union and said CBA can be renegotiated at the option of the new bargaining agent. (ATU v. Hon. Noriel, G.R. No. L‐48367, Jan. 16, 1979) 8. A CBA registered with falsified supporting documents 9. CBA was concluded in violation of an order enjoining the parties from entering into a CBA until the issue of representation is resolved 10. Petition is filed during the 60‐day freedom period. Note: Basic to the contract bar rule is the proposition that the delay of the right to select representatives can be justified only where stability is deemed paramount. Excepted from the contract bar rule are certain types of contracts which do not foster industrial stability, such as contracts where the identity of the representative is in doubt. Any stability derived from such contracts must be subordinated to the Ees’ freedom of choice because it does not establish the type of industrial peace contemplated by law. (Firestone Tire & Rubber Company Ee’s Union v. Estrella, G.R. No. L‐45513‐14, Jan. 6, 1978)

Q: Can the BLR certify a union as the exclusive bargaining representative after showing proof of majority representation thru union membership cards without conducting an election? A: No. The LC (In Arts. 256, 257 and 258) provides only for a CE as the mode for determining the exclusive collective bargaining representative if there is a question of representation in an appropriate bargaining unit. (1998 Bar Question) Q: When does deadlock arise? A: It arises when there is an impasse, which presupposes reasonable effort at good faith

bargaining which, despite noble intentions, did not conclude in an agreement between the parties. Q: What is deadlock bar rule? A: A petition for certification election (PCE) cannot be entertained if, before the filing of the PCE, a bargaining deadlock to which an incumbent or certified bargaining agent is a party, had been submitted to conciliation or arbitration or had become the subject of a valid strike or lockout. Q: What are the indications of a genuine deadlock? A: 1. 2.

The submission of the deadlock to a third party conciliator or arbitrator; and The deadlock is the subject of a valid notice strike or lockout.

Q: Capitol Medical Center Ees’ Association‐Alliance of Filipino Workers (CMCEA‐AFW) emerged as the certified representative of the rank‐and‐file Ees at Capitol Medical Center (CMC). Due to CMC’s refusal to bargain collectively, CMCEA‐AFW filed a notice of strike and later on staged the strike after complying with the other legal req’ts. The SLE assumed jurisdiction over the case and issued an order certifying the same to the NLRC for compulsory arbitration. During all of these events Capitol Medical Center Alliance of Concerned employees (Ees)‐Unified Filipino Service Workers filed a petition for CE among the regular rank‐and‐ file Ees of CMC. The petition for CE was dismissed and the CMC was directed to negotiate with CMCEA‐AFW. Was the dismissal of the PCE proper? A: Yes, if the law proscribes the conduct of a CE when there is a bargaining deadlock submitted to conciliation or arbitration, with more reason should it not be conducted if, despite attempts to bring an Er to the negotiation table by the certified bargaining agent, there was "no reasonable effort in good faith" on the Er to bargain collectively. The circumstances in this case should be considered as similar in nature to a "bargaining deadlock" when no CE could be held. This is also to make sure that no floodgates will be opened for the circumvention of the law by unscrupulous Ers to prevent any certified bargaining agent from negotiating a CBA. Sec. 3, (Rule VIII), Book V of the IRR should be interpreted liberally so as to include a circumstance where a CBA could not be concluded due to the failure of one party to willingly perform its duty to bargain collectively. (Capitol Medical Center Alliance of Concerned Ees v. Laguesma, G.R. No. 118915, Feb. 4, 1997)

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UST GOLDEN NOTES 2011 Q: Should the certification election proceedings be suspended in view of the pending case for cancellation of the union’s certificate of registration? A: No, the pendency of a cancellation case is not a ground for the dismissal or suspension of a representation proceeding considering that a registered labor organization (LO) continues to be a legitimate one entitled to all the rights appurtenant thereto until a final valid order is issued cancelling such registration. Once a LO attains the status of a LLO it begins to possess all of the rights and privileges granted by law to such organizations. As such rights and privileges ultimately affect areas which are constitutionally protected, the activities in which LO, associations and unions are engaged directly affect the public interest and should be zealously protected. (Progressive Dev’t Corp. v. SLE, G.R. No. 115077, April 18, 1997) Q: What is negotiation bar rule? A: A PCE cannot be entertained if, before the filing of the PCE, the duly recognized or certified union has commenced negotiations with the Er in accordance with Art. 250 of the LC. Q: What is certification year rule? A: No PCE may be filed within one year from the date of a valid certification, consent, or run‐off election or from the date of voluntary recognition. (4)Run‐off Election Q: What is a run‐off election? A: An election conducted when: 1.

2.

3.

4.

5.

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An election which provides for 3 or more choices results in none of the contending unions receiving a majority of the valid votes cast, and There are no objections or challenges which if sustained can materially alter the results, provided The total number of votes for all the contending unions is at least 50% of the number of votes cast. (Sec. 1, Rule X, Book V, IRR) Not one of the choices obtained the majority of the valid votes cast (50%+ 1 second majority); The two choices which garnered the highest votes will be voted and the one which garners the highest number of

votes will be declared the winner provided they get the majority votes of the total votes cast. Q: Who are the choices in a run‐off election? nd A: The unions receiving the highest and 2 highest number of the votes cast. (Sec.2, Rule X, Book V, IRR) Note: “No Union” shall not be a choice in the run‐off election

(5)Re‐run Election Q: When does Re‐run Election take place? A:

1. If one choice receives a plurality of the vote and the remaining choices results in a tie; or 2. If all choices received the same number of votes.

Note: In both instances, the no union is also a choice.

(5)Consent Election Q: What is a consent election? A: An election voluntarily agreed upon by the parties, with or without the intervention by DOLE. (Sec.1 [h], Rule I, Book V, IRR) Note: To afford an individual employee‐voter an informed choice where a local/chapter is the petitioning union, the local/chapter shall secure its certificate of creation at least 5 working days before the date of the consent election. (Sec.1, Rule VIII, Book V, IRR as amended by DO 40‐F‐03)

Q: What are the requisites before a labor union can be declared a winner (double majority rule)? A: 1. 2.

Majority of the eligible voters cast their votes. Majority of the valid votes cast is for such union.

Q: How to determine the double majority rule? A: 1. In determining the eligible votes cast (first majority) include spoiled ballots 2. In determining valid votes (second majority), eliminate spoiled ballots but included the challenged votes.


LABOR RELATIONS LAW Q: A certification election was conducted among the rank‐and‐file Ees of Holiday Inn Manila Pavilion Hotel. In view of the significant number of segregated votes, contending unions, National Union of Workers in Hotels, Restaurants and Allied Industries—Manila Pavilion Hotel Chapter (NUWHRAIN‐MPHC) and Holiday Inn Manila Pavilion Hotel Labor Union (HIMPHLU), referred the case back to the Med‐Arbiter to decide which among those votes would be opened and tallied. 11 votes were initially segregated because they were cast by dismissed Ees, albeit the legality of their dismissal was still pending before the CA. 6 other votes were segregated because the Ees who cast them were already occupying supervisory positions at the time of the election. Still 5 other votes were segregated on the ground that they were cast by probationary Ees and, pursuant to the existing CBA, such Ees cannot vote. NUHWHRAIN‐MPHC further avers that HIMPHLU, which garnered 169 votes, should not be immediately certified as the bargaining unit, as the opening of the 17 segregated ballots would push the number of valid votes cast to 338, hence, the 169 votes which HIMPHLU garnered would be 1 vote short of the majority which would then become 170. Was HIMPHLU able to obtain the required majority for it to be certified as the exclusive bargaining agent? A: No, it is well‐settled that under the “double majority rule” for there to be a valid certification election, majority of the bargaining unit must have voted and the winning union must have garnered majority of the valid votes cast. Following the ruling that all the probationary Ees votes should be deemed valid votes while that of the supervisory Ees should be excluded, it follows that the number of valid votes cast would increase. Under Art. 256 of the LC, the union obtaining the majority of the valid votes cast by the eligible voters shall be certified as the sole exclusive bargaining agent of all the workers in the appropriate bargaining unit. This majority is 50% + 1, in this case at least 170. HIMPHLU obtained 169, clearly it was not able to obtain a majority vote. (NUWHRAIN ‐ MPHC v. SLE, G.R. No. 181531, July 31, 2009) Q: Distinguish certification election, consent election, direct certification, and run‐off and re‐ run elections. A: Participation of Med‐Arbiter Certification Election

Purpose

To determine the sole and exclusive bargaining agent of all the Ees in an appropriate bargaining unit for the purpose of collective bargaining.

Requires petition for CE filed by a union or Er. A Med‐Arbiter grants the petition and an election officer is designated by regional director to supervise the election. Note: Med‐Arbiter may determine if there is Er‐Ee relationship and if the voters are eligible.

Consent Election To determine the issue of majority representation of all the workers in the appropriate CB unit mainly for the purpose of determining the Held by agreement of the administrator of the CBA unions with or without the participation of the when the contracting Med‐Arbiter. union suffered massive disaffiliation and not for the purpose of determining the bargaining agent for purpose of CB. Direct Certification Med‐Arbiter directly A LO is directly certified certifies that a labor as an appropriate union is the exclusive CB bargaining unit of a representative of the Ees company upon showing of an appropriate that petition is supported bargaining unit without by at least a majority of holding a CE, but merely the Ees in the bargaining on the basis of evidence unit. of in support of the union’s claim that is the Note: Direct certification is choice of the majority of no longer allowed. the Ees. Run‐Off Election Takes place between the unions who received the two highest number of votes in a CE with 3 or more choices, where not one of the unions obtained the majority of the valid votes cast, provided the total union votes is at least 50% of the votes cast. Re‐run Election Takes place in 2 instances: 1. If one choice receives a plurality of the vote and the remaining choices results in a tie; or 2. If all choices received the same number of

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UST GOLDEN NOTES 2011 votes. In both instances, the no union is also a choice.

2.

Note: Petition for cancellation of registration is not a bar to a PCE. No prejudicial question shall be entertained in a petition for certification election. (D.O. 40‐03)

(7)Affiliation and Disaffiliation of the Local Union from the Mother Union Q: How is a local chapter created? A: A duly registered federation or national union may directly create a local/ chapter by issuing a charter certificate indicating the establishment of a local/chapter. 1. The chapter shall acquire legal personality only for purposes of filing a petition for certification election from the date it was issued a charter certificate 2. The chapter shall be entitled to all other rights and privileges of a legitimate labor organization (LLO) only upon the submission of the following documents in addition to its charter certificate: a. Names of the chapter’s officers, their addresses, and the principal office of the chapter b. Chapter’s constitution and by‐laws c. Where the chapter’s constitution and by‐laws are the same as that of the federation or the national union, this fact shall be indicated accordingly 3. The genuineness and due execution of the supporting requirements shall be: a. Certified under oath by the secretary or treasurer of the local/chapter, and b. Attested to by its president (Sec.2[e], Rule III, Book V, IRR, as amended by D.O. 40‐F‐03) Note: Under the LC and the rules, the power granted to LOs to directly create a chapter or local through chartering is given to a federation or national union only, not to a trade union center. (SMCEU v. San Miguel Packaging Products Ees Union, G.R. No. 171153, Sep. 12, 2007)

Q: Where is the application for registration filed? A: 1.

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Independent labor unions, chartered locals or worker’s associations – It is filed with the Regional Office (RO). where the applicant principally operates. It shall be

processed by the Labor Relations Division at the RO. Federations, national unions or worker’s association operating in more than one region – It is filed with the BLR of the RO, but shall be processed by the BLR.

Q: What is the duty of the BLR after a LO had filed the necessary papers and documents for registration? A: It becomes mandatory for the BLR to check if the req’ts under Art. 234 of the LC have been sedulously complied with. If its application for registration is vitiated by falsification and serious irregularities, especially those appearing on the face of the application and the supporting documents, a LO should be denied recognition as a LLO. (Progressive Dev’t Corp.‐Pizza Hut v. Laguesma, G.R. No. 115077, April 18, 1997) Q: Within what period should the BLR act on the applications submitted before it? A: It shall act on all applications for registration within 10m days from receipt either by: 1. Approving the application and issuing the certificate of registration/acknowledging the notice/report; or 2. Denying the application/notice for failure of the applicant to comply with the requirements for registration/notice (D.O. 40‐03, Rule IV, Sec.4, series of 2003) Note: All requisite documents shall be: 1. Certified under oath by the secretary or treasurer of the organization, as the case may be and 2. Attested to it by its President.

Q: May the BLR review the issuance of a certificate of registration? A: No. The BLR has the duty to review the application for registration not the issuance of a certificate of registration. Q: Why is a lesser requirement imposed for a chartered local? A: The intent of the law in imposing lesser req’ts in the case of branch or local of a registered federation or national union is to encourage the affiliation of a local union in order to increase the local union’s bargaining power respecting terms and conditions of labor. (Progressive Dev’t Corp v. SLE, G.R. No. 96425, Feb. 4, 1992)


LABOR RELATIONS LAW Q: What are the requirements before a federation can be issued a certificate of registration?

3.

A: The application for registration of federations and national unions shall be accompanied by the following documents:

4.

1.

2.

A statement indicating the name of the applicant labor union, its principal address, the name of its officers and their respective addresses; The minutes of the organizational meeting(s) and the list of Ees who participated in the said meeting(s);

3.

4.

The annual financial reports if the applicant union has been in existence for 1 or more years, unless it has not collected any amount from the members, in which case a statement to this effect shall be included in the application; The applicant union's constitution and by‐ laws, minutes of its adoption or ratification, and the list of the members who participated in it. The list of ratifying members shall be dispensed with where the constitution and by‐laws was ratified or adopted during the organizational meeting(s). In such a case, the factual circumstances of the ratification shall be recorded in the minutes of the organizational meeting(s);

5.

6.

The resolution of affiliation of at least 10 LLOs, whether independent unions or chartered locals, each of which must be a duly certified or recognized bargaining agent in the establishment where it seeks to operate; and The name and addresses of the companies where the affiliates operate and the list of all the members in each company involved. (D.O. 40‐03, Rule, III, Sec. 2‐B, series of 2003)

Q: What are the requirements for affiliation? A: The report of affiliation of independently registered labor unions with a federation or national union shall be accompanied by the following documents: 1. Resolution of the labor union's board of directors approving the affiliation; 2. Minutes of the general membership meeting approving the affiliation;

5.

The total number of members comprising the labor union and the names of members who approved the affiliation; The certificate of affiliation issued by the federation in favor of the independently registered labor union; and Written notice to the employer concerned if the affiliating union is the incumbent bargaining agent. (D.O. 40‐03, Rule, III, Sec. 7, series of 2003)

Q: What is the effect of affiliation? A: The labor union that affiliates with a federation is subject to the laws of the parent body under whose authority the local union functions. The constitution, by‐laws and rules of the mother federation, together with the charter it issues to the local union, constitutes an enforceable contract between them and between the members of the subordinate union inter se. Thus, pursuant to the constitution and by‐laws, the federation has the right to investigate and expel members of the local union. (Villar v. Inciong, G.R. No. L‐50283‐84, April 20, 1983) Q: May a local union disaffiliate from the federation? A: GR: A labor union may disaffiliate from the mother union to form an independent union only during the 60‐day freedom period immediately preceding the expiration of the CBA. XPN: Even before the onset of the freedom period, disaffiliation may still be carried out, but such disaffiliation must be effected by the majority of the union members in the bargaining unit. Note: This happens when there is a substantial shift in allegiance on the part of the majority of the members of the union. In such a case, however, the CBA continues to bind the members of the new or disaffiliated and independent union up to determine the union which shall administer the CBA may be conducted. (ANGLO‐KMU v. Samahan ng Manggagawang Nagkakaisa sa Manila Bay Spinning Mills at J.P. Coats, G.R. No.118562, July 5, 1996)

Q: What is the limitation to disaffiliation? A: Disaffiliation should be in accordance with the rules and procedures stated in the constitution and by‐laws of the federation. A local union may disaffiliate with its mother federation provided that there is no enforceable provision in the federation’s

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UST GOLDEN NOTES 2011 constitution preventing disaffiliation of a local union. (Tropical Hut Ees Union v. Tropical Hut, G.R. Nos. L‐43495‐99, Jan. 20, 1990) Note: A prohibition to disaffiliate in the Federation’s constitution and by‐laws is valid because it is intended for its own protection.

Q: What is the effect of cancellation of registration of a federation or a national union? A: GR: It shall operate to divest its locals/chapters of their status as LLO. XPN: Locals/chapters retain status as LLO if they arecovered by a duly registered CBA. Note Locals or chapters who retained status as LLO shall be allowed to register as independent unions. If they fail to register, they shall lose their legitimate status upon the expiration of the CBA.

Q: PSEA is a local union in Skylander company which is affiliated with PAFLU. PSEA won the certification election among the rank and file Ees of the Skylander company but its rival union PSEA‐ WATU protested the results. Pending the resolution of such controversy, PSEA disaffiliated with PAFLU and hence affiliated with NCW which was supported by its members. May a local union disaffiliate with its mother federation pending the settlement of the status as the sole and exclusive bargaining agent? A: Yes. The pendency of an election protest does not bar the valid disaffiliation of the local union which was supported by the majority of its members. The right of a local union to disaffiliate with the federation in the absence of any stipulation in the constitution and by‐laws of the federation prohibiting disaffiliation is well settled. Local unions remain as the basic unit of association, free to serve their own interest subject to the restraints imposed by the constitution and by‐laws of national federation and are free to renounce such affiliation upon the terms and conditions laid down in the agreement which brought such affiliation to existence. In the case at bar, no prohibition existed under the constitution and by‐laws of the federation. Hence, the union may freely disaffiliate with the federation. (Philippine Skylanders v. NLRC, G.R. No. 127374, Jan. 31, 2002) Q: Distinguish between an independently registered and unregistered chartered local union. A:

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CHARTERED LOCAL UNION Independently Unregistered Registered How to affiliate? By application of with the federation for the By signing contract of issuance of a charter affiliation certificate to be submitted to the BLR Effect of Disaffiliation to the union (local) Would cease to be LLO Would not affect its being and would no longer a LLO and therefore it have the legal personality would continue to have and the rights and legal personality and to privileges granted by law posses all rights and to LLO, unless the local privileges of LLO. chapter is covered by its duly registered CBA. Effect of Disaffiliation to the CBA The CBA would continue An existing CBA would to be valid. The local continue to be valid as chapter will not lose its the LO can continue personality, unless it administering then CBA. registers a new. Entitlement to union dues after Disaffiliation Union dues may no LO entitled to the union longer be collected as dues and not the there would no longer be federation from which any labor union that is the LO disaffiliated. allowed to collect such union dues from the Ees.

Q: What is the form of the decision of the denial of application for registration? A: It shall be: 1. In writing 2. Stating in clear terms the reason for the decision 3. Applicant union must be furnished a copy of said decision. Q: Is the denial of registration appealable? A: Yes. 1. Decisions of the Regional Office shall be appealable to the BLR and CA. 2. The BLR’s decisions on cases appealed from Regional Director are final and not appealable to the SLE. 3. Decisions of the BLR denying the registration of a LO (federation or national union) is appealable to the SLE within 10 days from receipt of the decision, on grounds of: a. Grave abuse of discretion; or b. Gross incompetence. 4. Decision of SLE appealable to CA.


LABOR RELATIONS LAW a.

Q: How is appeal taken with regard to denial or cancellation of registration? A: DENIAL OR CANCELLATION OF REGISTRATION By Regional office By BLR Transmit records within 24 hours from receipt of the Memo of Appeal BLR will decide on the SLE decides on the matter matter within 20 days within 20 days from from receipt of the receipt of records records Appeal to CA via Rule 65 Note: Appeal is by memo of appeal within 10 days from receipt of notice.

Q: Who cancels the certificate of registration? A: The certificate of registration of any LLO, whether national or local, may be cancelled by the BLR, after due hearing, only on the grounds specified in Art. 239. (as amended by R.A. 9481) Q: What is the effect of a petition for cancellation or of union registration? A: It shall not suspend the proceedings for certification election (CE) nor shall it prevent the filing of CE. In case of cancellation, nothing herein shall restrict the right of the union to seek just and equitable remedies in the appropriate courts. Q: Where is a petition for cancellation of registration or application for voluntary dissolution filed? A: 1.

2.

For legitimate independent labor unions, local/chapter and worker’s association – It shall be filed with the Regional Office which issued its certificate of registration or creation. For federations, national or industry and trade union centers – It shall be filed with the BLR. (Sec. 1, Rule XIV, Book V, IRR as amended by D.O. 40‐F‐03)

Q: Who may file a petition for cancellation of registration? A: 1.

For legitimate individual labor union, chartered local and worker’s association – Any party‐in‐interest may file a petition for cancellation of registration if the ground is:

2.

Failure to comply with any of the req’ts under Art. 234, 237 and 238 of the LC. b. Violation of any provision under Art. 239, LC. For federations, national or industry unions, trade union centers – Only members of the labor organization (LO) concerned may file if the grounds are actions involving violations of Art. 241, subject to the 30% rule.

Q: What is the effect of cancellation of registration if the cancellation is made in the course of the proceedings? A: Where a labor union is a party in a proceeding and later it loses its registration permit in the course or during the pendency of the case, such union may continue as party without need of substitution of parties, subject however to the understanding that whatever decision may be rendered will be binding only upon those members of the union who have not signified their desire to withdraw from the case before its trial and decision on the merits. Note: Rationale: Principle of agency is applied – the Ees are the principals, and the LO is merely an agent of the former, consequently, the cancellation of the union’s registration would not deprive the consenting member‐Ees of their right to continue the case as they are considered as the principals.

Q: What are the grounds for cancellation of union registration? A: 1. Misrepresentation, false statement or fraud in connection with the: a. Adoption or application of the constitution and by‐laws or amendments thereto b. Minutes of ratification and c. List of members who took part in the ratification; d. Election of officers e. Minutes of the election of officers and f. List of voters (Art. 239 as amended) 2. Voluntary dissolution by the members. (as amended by R.A. 9481) Note: A pronouncement as to the legality of the strike is not within the meaning of Art. 239 of the LC.

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UST GOLDEN NOTES 2011 Q: What are the prohibited grounds for cancellation of union registration? A: 1. The inclusion as union member of Ees who are outside the bargaining unit shall not be a ground to cancel the union registration. The ineligible Ees are automatically deemd removed from the list of membership of the union as.(Art. 245‐A as amended by RA 9481) 2. The affiliation of the rank‐and‐file and supervisory unions operating within the same establishment to the same federation or national union shall not be a ground to cancel registration of either union. (Sec. 6, Rule XIV, Book V, as inserted by D.O. 40‐F‐03) Q: How is voluntary cancellation of registration made? A: Registration may be cancelled by the organization itself provided: 1. At least ⅔ of its general membership votes to dissolve the organization, in a meeting duly called for that purpose; and 2. An application to cancel registration is thereafter submitted by the board of the organization, attested by its president. Q: What are the “reportorial requirements” required to be submitted by a legitimate labor organization (LLO) ? A: The following documents are required to be submitted to BLR by the LLO concerned: 1.

2.

3. 4.

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Within 30 days from adoption or ratification of the constitution and by laws (CBL) or amendments thereto: a. CBL or amendments thereto b. Minutes of ratification c. List of members who took part in the ratification of the constitution and by‐laws; Within 30 days from date of election or appointment: a. List of elected and appointed officers and agents entrusted with the handing of union funds b. Minutes of election of officers c. List of voters Annual financial report within 30 days after the close of every fiscal year List of members at least once a year or whenever required by the Bureau. (Sec. 1,

Rule V, Book V, IRR, as amended by D.O. 40‐F‐03) Note: Failure to submit reportorial requirements is no longer a ground for cancellation but shall subject the erring officers or members to suspension, expulsion from membership, or any appropriate penalty (Art. 242‐A, as inserted by R.A. 9481).

Q: What is the successor‐ in‐interest doctrine? A: GR: It is when an Er with an existing CBA is succeeded by another Er, the successor‐in‐ interest who is the buyer in good faith has no liability to the Ees in continuing employment and the bargaining agreement because these contracts are in personam. XPNs: 1. When the successor‐in‐interest expressly assumes an obligation; 2. The sale is a device to circumvent the obligation; or 3. The sale or transfer is made in bad faith. (a)Substitutionary Doctrine Q: What is the substitutionary doctrine? A: It is where there occurs a shift in the Ees union allegiance after the execution of a collective bargaining (CB) contract with the Er, the Ees can change their agent (labor union) but the CB contract which is still subsisting continues to bind the Ees up to its expiration date. They may however, bargain for the shortening of said expiration date. Note: The Er cannot revoke the validly executed CB contract with their Er by the simple expedient of changing their bargaining agent. The new agent must respect the contract. (Benguet Consolidated Inc. v. BCI Ees and Worker’s Union‐PAFLU, G.R. No. L‐24711, April 30, 1968) It cannot be invoked to support the contention that a newly certified CB agent automatically assumes all the personal undertakings of the former agent‐like the “no strike clause” in the CBA executed by the latter.

(8)Union Dues and Special Assessments (a) Union Dues Q: What are union dues? A: These are regular monthly contributions paid by the members to the union in exchange for the


LABOR RELATIONS LAW benefits given to them by the CBA and to finance the activities of the union in representing the union. Q: What is check‐off? A: It is a method of deducting from an Ee’s pay at a prescribed period, the amounts due the union for fees, fines and assessments. Deductions for union service fees are authorized by law and do not require individual check‐off authorizations. Q: What is the nature and purpose of check‐off? A: Union dues are the lifeblood of the union. All unions are authorized to collect reasonable membership fees, union dues, assessments and fines and other contributions for labor education and research, mutual death and hospitalization benefits, welfare fund, strike fund and credit and cooperative undertakings.(Art. 277[a]) Q: What are the requisites of a valid check‐off? A: GR: No special assessments, atty’s fees, negotiation fees or any other extraordinary fees may be checked off from any amount due to an employee (Ee) without individual written authorization duly signed by the Ee. The authorization should specifically state the: 1. Amount 2. Purpose & 3. Beneficiary of the deduction. XPNs: 1. For mandatory activities under the LC 2. For agency fees 3. When non‐members of the union avail of the benefits of the CBA: a. Non‐members may be assessed union dues equivalent to that paid by union members; b. Only by board resolution approved by majority of the members in general meeting called for the purpose.

Q: What are the requisites for a valid levy of special assessment or extraordinary fees? A: 1. Authorization by a written resolution of the majority of all members at the general membership meeting duly called for that purpose; 2. Secretary’s record of the minutes of the meeting, which must include the: a. List of members present b. Votes cast c. Purpose of the special assessments d. Recipient of such assessments; 3. Individual written authorization to check‐ off duly signed by the Ee concerned – to levy such assessments. Q: What is the effect of failure to strictly comply the requirements set by law? A: It shall invalidate the questioned special assessments. Substantial compliance of the requirements is not enough in view of the fact that the special assessment will diminish the compensation of union members. (Palacol v. Ferrer‐ Calleja, G.R. No. 85333, Feb. 26, 1990) Q: Who has jurisdiction over check‐off disputes? A: Being an intra‐union dispute, the Regional Director of DOLE has jurisdiction over check off disputes. Q: Distinguish check‐off from special assessments. A: Check‐off

Special Assessment How approved (Union Dues) By obtaining the individual By written resolution approved by majority of written authorization duly all the members at the signed by the Ee which meeting called for that must specify: purpose. 1. Amount 2. Purpose 3. Beneficiary Exception to such requirement

(b) Special Assessments Q: What are special assessments or extraordinary fees? A: These are assessments for any purpose or object other than those expressly provided by the labor organization’s constitution and by‐laws.

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UST GOLDEN NOTES 2011 (Agency fees) Not necessary when: 1. For mandatory activities under the LC 2. For agency fees 3. When non‐members of the union avail of the benefits of the CBA: a. Said non‐members may be assessed union dues equivalent to that paid by union members; b. Only by Board resolution approved by majority of the members in general meeting called for the purpose

Union Dues Is deducted from members for the payment of union dues May not be deducted from the salaries of the union members without the written consent of the workers affected.

No exception; written resolution is mandatory in all instances.

Q: Are Ees who are members of another union considered free riders? A: No. When the union bids to become the bargaining agent, it voluntarily assumes the responsibility of representing all the Ees. (9)Agency Fees Q: What is an agency fee? A: It is an amount equivalent to union dues, which a non‐union member pays to the union because he benefits from the CBA negotiated by the union. Note: Agency fee cannot be imposed on Ees already in the service and are members of another union. If a closed shop agreement cannot be applied to them, neither may an agency fee, as a lesser form of union security, be imposed to them. Payment by non‐union members of agency fees does not amount to an unjust enrichment basically the purpose of such dues is to avoid discrimination between union and non‐union members.

2.RIGHT TO COLLECTIVE BARGAINING Q: What is collective bargaining (CB)? A: 1. It is the process of negotiation by an organization or group of workmen, in behalf of its members, with the employer (Er), concerning wages, hours of work, and other terms and conditions of employment and 2. The settlement of disputes by negotiation between an Er and the representative of his employees (Ee) 3. It is the obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work and all other terms and conditions of employment including proposals for adjusting any grievances or questions arising under such agreement and executing a contract incorporating such agreements if requested by either party but such does not compel any party to agree to a proposal or to make any concession. (Art. 252, LC) Note: GR: No court or administrative agency or official shall have the power to set or fix wages, rates of pay, hours of work, or other terms and conditions of employment

A: The employee is part of the bargaining unit He is not a member of the union He partook of the benefits of the CBA

XPNs: As otherwise provided under the LC: 1.

Note: The individual authorization required under Art. 242, par. O of the LC shall not apply to the non‐ members of the recognized collective bargaining agent.

2. 3.

Q: Distinguish union dues from agency fees.

National Wages and Productivity Commission and RTWPB as to wage fixing. (Art. 99 and 122, LC) NCMB and NLRC as to wage distortion. (Art. 124, LC) SLE and President of the Philippines as to certification and assumption of powers over labor disputes. (Art. 236[g], LC)

A:

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May be deducted from the salary of the Ees without their written consent.

Q: What are the requisites for assessment of Agency fees (Art. 248 [e], LC)?

1. 2. 3.

Agency Fee Is deducted from non‐ members of the bargaining agent (union) for the enjoyment of the benefits under the CBA.


LABOR RELATIONS LAW Q: What is the purpose behind this rule? A: It is to encourage a truly democratic method of regulating the relations between the employers and employees by means of agreements freely entered into through CB. Q: Who are the parties to a CB? A: 1. Employer 2. Employees, represented by the exclusive bargaining agent Q: What are the jurisdictional preconditions in collective bargaining? A: 1. Possession of the status of majority representation of the employees representative in accordance with any of the means of selection or designation provided for the Labor Code 2. Proof of majority representation 3. A demand to bargain under Art. 250 (a) of the LC. (Kiok Loy v. NLRC, G.R. No. L‐ 54334, Jan.22, 1986) a.Duty to Bargain Collectively Q: When does the duty of the employer (Er) to bargain collectively arise? A: Only after the union requests the Er to bargain. If there is no demand, the Er cannot be in default. Note: Where a majority representative has been designated, it is an ULP for the Er, as a refusal to collectively bargain, to deal and negotiate with the minority representative to the exclusion of the majority representative. Where there is a legitimate representation issue, there is no duty to bargain collectively on the part of the Er (Lakas ng mga Manggagawang Makabayan v. Marcelo Enterprises, G.R. No. L‐38258, Nov. 19, 1982)

Q: What is a collective bargaining agreement (CBA)? A: It is a contract executed upon request of either the Er or the exclusive bargaining representative of the Ees incorporating the agreement reached after negotiations with respect to wages, hours of work, terms and conditions of employment, including proposals for adjusting any grievance or questions under the agreement.

Note: The certification of the CBA by the BLR is not required to make such contract valid. Once it is duly entered into and signed by the parties, a CBA becomes effective as between the parties whether or not it has been certified by the BLR. (Liberty Flour Mills Ee’s Association v. Liberty Flour Mills, G.R. Nos. 58768‐70, Dec. 29, 1989)

Q: What is a zipper clause? A: It is a stipulation in a CBA indicating that issues that could have been negotiated upon but not contained in the CBA cannot be raised for negotiation when the CBA is already in effect. A CBA is not an ordinary contract but one impressed with public interest, only provisions embodied in the CBA should be so interpreted and complied with. Where a proposal raised by a contracting party does not find print in the CBA, it is not a part thereof and the proponent has no claim whatsoever to its implementation. (SMTFM‐UWP v. NLRC , G.R. No. 113856, Sept. 7, 1998)

Q: When shall bargaining commence? A: It commences within 12 months after the determination and certification of the Ees exclusive bargaining representative. (certification year) Q: What is the procedure in CB? A: When a party desires to negotiate an agreement: 1. It shall serve a written notice upon the other party with a statement of proposals 2. Reply by the other party shall be made within 10 days with counter proposals 3. In case of differences, either party may request for a conference which must be held within 10 calendar days from receipt of request 4. If not settled, NCMB may intervene and encourage the parties to submit the dispute to a voluntary arbitrator 5. If not resolved, the parties may resort to any other lawful means (either to settle the dispute or submit it to a voluntary arbitrator). Note: During the conciliation proceeding in the NCMB, the parties are prohibited from doing any act which may disrupt or impede the early settlement of disputes. (Art.250[d], LC)

Q: What are the stages in CB? A:

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2. 3. 4. 5.

6. 7.

Preliminary process: Sending a written notice for negotiation which must be clear and unequivocal Negotiation process. Execution process: The signing of the agreement Publication for at least 5 days before ratification Ratification by the majority of all the workers in the bargaining unit represented in the negotiation (not necessary in case of arbitral award) Registration process. Administration process: The CBA shall be jointly administered by the management and the bargaining agent for a period of 5 years. Interpretation and Application process.

8. Q: Does a petition for cancellation of a union’s certificate of registration involve a prejudicial question that should first be settled before parties could be required to collectively bargain? A: No. A pending cancellation proceeding is not a bar to set mechanics for collective bargaining (CB). If a certification election may still be held even if a petition for cancellation of a union’s registration is pending, more so that the CB process may proceed. The majority status of the union is not affected by the cancellation proceedings. (Capitol Medical Center v. Trajano, G.R. No. 155690, June 30, 2005) Q: What is the duty to bargain collectively when there is no CBA? A: It is the performance of a mutual obligation: 1. 2.

3.

4.

To meet and convene promptly and expeditiously in good faith (GF) For the purpose of negotiating an agreement with respect to wages, hours of work and all other terms and conditions of employment Including proposals for adjusting any grievances or questions arising under such agreement; and To execute a contract incorporating such agreements if requested by either party. (Art. 252)

Q: What are the limitations to the duty to bargain collectively? A: 1. Such duty does not compel any party to agree to a proposal or to make any concession.

146

2.

Parties cannot stipulate terms and conditions of employment which are below the minimum req’ts prescribed by law.

Q: May either party bargain to an impasse? A: It depends: 1. Where the subject of a dispute is a mandatory bargaining subject, either party may bargain to an impasse as long as he bargains in GF. 2. Where the subject is non‐mandatory, a party may not insist in bargaining to the point of impasse. His instance may be construed as evasion of duty to bargain. Q: What is the test of bargaining in bad faith? A: There is no perfect test of good faith (GF) in bargaining. The GF or BF is an inference to be drawn from the facts and is largely a matter for the NLRC’s expertise. The charge of BF should be raised while the bargaining is in progress. Note: With the execution of the CBA, BF can no longer be imputed upon any of the parties thereto. All provisions in the CBA are supposed to have been jointly and voluntarily incorporated therein by the parties. This is not a case where private respondent exhibited an indifferent attitude towards CB because the negotiations were not the unilateral activity of petitioner union. The CBA is good enough that private respondent exerted “reasonable effort of GF bargaining.” (Samahang Manggagawa sa Top Form Manufacturing‐United Workers of the Phils v. NLRC, G.R. No. 113856, Sept. 7, 1998)

Q: Does an Er’s steadfast insistence to exclude a particular substantive provision in the negotiations for a CBA constitute refusal to bargain or bargaining in BF? A: No. This is no different from a bargaining representative’s perseverance to include one that they deem of absolute necessity. Indeed, an adamant insistence on a bargaining position to the point where the negotiations reach an impasse does not establish bad faith. Obviously, the purpose of CB is the reaching of an agreement resulting in a contract binding on the parties; but the failure to reach an agreement after negotiations have continued for a reasonable period does not establish a lack of good faith. The statutes invite and contemplate a collective bargaining contract, but they do not compel one. The duty to bargain does not include the obligation to reach an


LABOR RELATIONS LAW agreement. While the law makes it an obligation for the Er and the Ees to bargain collectively with each other, such compulsion does not include the commitment to precipitately accept or agree to the proposals of the other. All it contemplates is that both parties should approach the negotiation with an open mind and make reasonable effort to reach a common ground of agreement. (Union of Filipro Ees v. Nestle Phils., G.R. Nos. 158930‐31, Mar. 3, 2008) Q: What is a deadlock? A: It is synonymous with impasse or a standstill which presupposes reasonable effort at GF bargaining but despite noble intentions does not conclude an agreement between the parties. Q: In case of deadlock in the renegotiation of the CBA, what are the actions that may be taken by the parties? A: The parties may: 1. Call upon the NCMB to intervene for the purpose of conducting conciliation or preventive mediation; 2. Refer the matter for voluntary arbitration or compulsory arbitration; 3. Declare a strike or lockout upon compliance with the legal req’ts (This remedy is a remedy of last resort). Q: May economic exigencies justify refusal to bargain? A: No. An employer is not guilty of refusal to bargain by adamantly rejecting the union’s economic demands where he is operating at a loss, on a low profit margin, or in a depressed industry, as long as he continues to negotiate. But financial hardship constitutes no excuse for refusing to bargain collectively. Q: What is the duty to bargain collectively when there is a CBA? A: 1. When there is a CBA the duty to bargain collectively shall also mean that neither party shall terminate nor modify such agreement during its lifetime. 2. Either party can serve a written notice to terminate or modify the agreement at least 60 days prior to its expiration date. 3. It shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions

of the existing agreement during the 60‐ day period and/or until a new agreement is reached by the parties. (Art. 253, LC) Q: What is the automatic renewal clause of CBAs? A: Although a CBA has expired, it continues to have legal effects as between the parties until a new CBA has been entered into (Pier & Arrastre Stevedoring Services, Inc. v. Confessor, G.R. No. 110854, February 13, 1995). This is so because the law makes it a duty of the parties to keep the status quo and to continue in full effect the terms and conditions of the existing agreement until a new agreement is reached by the parties. (Art. 253, LC). (2008 Bar Question) Q: What may be done during the 60‐day freedom period? A: 1. A labor union may disaffiliate from the mother union to form a local or independent union only during the 60‐day freedom period immediately preceding the expiration of the CBA. 2. Either party can serve a written notice to terminate or modify agreement at least 60‐days prior to its expiration period. 3. A petition for certification election may be filed. Q: When to file CBA? A: Within 30 days from execution of CBA. Q: What are the requirements for registration? A: The application for CBA registration shall be accompanied by the original and 2 duplicate copies of the following req’ts: 1. 2.

3.

CBA A statement that the CBA was posted in at least 2 conspicuous places in the establishment concerned for at least 5 days before its ratification Statement that the CBA was ratified by the majority of the Ees in the bargaining unit.

Note: The following documents must be certified under oath by the representative of the Er and the labor union. No other document shall be required in the registration of the CBA.

Q: What is a single enterprise bargaining?

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UST GOLDEN NOTES 2011 A: It involves negotiation between one certified labor union and one Er. Any voluntarily recognized or certified labor union may demand negotiations with its Er for terms and conditions of work covering Ee’s in the bargaining unit concerned. Q: What is a multi‐Er bargaining scheme? A: It involves negotiation between and among several certified labor unions and Ers. Q: What is the duration of a CBA? A: 1. With respect to the representation aspect (refers to the identity and majority status of the union that negotiated the CBA as the exclusive bargaining representative): 5 years 2. With respect to all other provisions (refers to the rest of the CBA, economic as well as non‐economic provisions other than representational provisions): 3 years after the execution of the CBA Q: What are the economic provisions of a CBA? A: 1. Wages 2. Family planning 3. Effectivity of the agreement 4. Other terms and conditions of employment Q: What are the non‐economic provisions of a CBA? A: 1. Coverage of the bargaining unit 2. Union security clauses 3. Management prerogatives and/or rights/responsibilities of employees 4. Grievance machinery and voluntary arbitration 5. No strike – no lock out provision Q: What is the effectivity and retroactivity date of other economic provisions of the CBA? A: 1. If the CBA is the very first for the bargaining unit, the parties have to decide the CBA effectivity date. 2. Those made within 6 months after date of expiry of the CBA are subject to automatic retroaction to the day immediately following the date of expiry.

148

3.

Those not made within 6 months, the parties may agree to the date of retroaction.

Note: This rule applies only if there is an existing agreement. If there is no existing agreement, there is no retroactive effect because the date agreed upon shall be the start of the period of agreement. Art. 253‐A on retroactivity does not apply if the provisions were imposed by the SLE by virtue of arbitration. It applies only if the agreement was voluntarily made by the parties.

Q: May the economic provisions of an existing CBA be extended beyond the 3 year period as prescribed by law in the absence of a new agreement? A: Yes. Under the principle of hold over, until a new CBA has been executed by and between the parties, they are duty bound to keep the status quo and must continue in full force and effect the terms and conditions of the existing agreement. The law does not provide for any exception or qualification as to which of the economic provisions of the existing agreement are to retain force and effect. Therefore, it must be encompassing all the terms and condition in the said agreement. (New Pacific Timber v. NLRC, G.R. No. 124224, Mar. 17, 2000) Q: Mindanao Terminal Company and respondent union has an existing CBA which was about to expire. Thus, negotiations were held regarding certain provisions of the CBA which resulted in a deadlock. Thus the union filed a notice of strike. During the conference called by the NCMB the company and the union were able to agree on all of the provisions of the CBA except for one. However, the last unresolved provision was subsequently settled but no CBA was signed. Hence, in the records of the Mediation Arbiter, all issues were settled before the lapse of the 6 month period after the expiration of the old CBA. Does the signing of the CBA determine the date it was entered into within the 6 month period? A: No. The signing of the CBA does not determine whether the agreement was entered into within the 6 month period from the date of expiration of the old CBA. In the present case, there was already a meeting of the minds between the company and the union prior to the end of the 6 month period after the expiration of the old CBA. Hence, such meeting of the mind is sufficient to conclude that an agreement has been reached within the 6 month period as provided under Art. 253‐A of the LC.


LABOR RELATIONS LAW (Mindanao Terminal and Brokerage Services Inc., v. Confessor, G.R. No. 111809, May 5, 1997) Q: When is the effectivity of a CBA arbitral award concluded beyond 6 months from the expiration of the old CBA? A: The CBA arbitral awards granted 6 months from the expiration of the last CBA shall retroact to such time agreed upon by both the Er and the union. Absent such agreement as to retroactivity, the award shall retroact to the 1st day after the 6 month period following the expiration of the last day of the CBA should there be one. In the absence of a CBA, the SLE’s determination of the date of retroactivity as part of his discretionary powers over arbitral award shall control. (Manila Electric Company v. Quisumbing, G.R. No. 127598, Feb. 22 and Aug. 1, 2000) Q: PAL was suffering from a worsened financial condition resulting to a retrenchment which downsized its labor force by more than 1/3 thereby affecting numerous union members. Hence, the union went on strike. The PAL offered that shares of stock be transferred to its Ees but the union refused. Thus, PAL claimed it has no alternative left but to close. Hence, the union PALEA offered that the CBA be suspended for 10 years and to waive some of the economic benefits in the CBA provided they remain the certified bargaining agent. PAL agreed and resumed operations. Is the agreement to suspend the CBA for 10 years abdicated the worker’s right to bargain? A: No. The primary purpose of a CBA is to stabilize labor‐management relations in order to create a climate of a sound and stable industrial peace. The assailed agreement was the result of the voluntary CB negotiations undertaken in the light of severe financial situation faced by PAL. Q: Is the agreement in conflict with Art. 253‐A of the LC? A: No. There is no conflict between the agreement and Art. 253‐A of the LC for the latter has a 2‐fold purpose namely: a) to promote industrial stability and predictability and b) to assign specific time tables wherein negotiations become a matter of right and requirement. In so far as the first purpose, the agreement satisfies the first purpose. As regard the second purpose, nothing in Art. 253‐A prohibits the parties from waiving or suspending the mandatory timetables and agreeing on the remedies to enforce the same.

Q: Does the agreement violate the 5 year representation limit as provided under Art. 253‐A of the LC? A: No. For under the said article, the representation limit of the exclusive bargaining agent applies only when there is an existing CBA in full force and effect. In this case, the parties agreed to suspend the CBA and put in abeyance the limit on representation. (Rivera v. Espiritu, G.R. No. 135547, Jan. 23, 2002) b.Mandatory provisions of the CBA Q: What are the mandatory provisions of the CBA? A: 1. 2. 3. 4. 5. 6. 7.

Grievance machinery Voluntary arbitration Wages Hours of work Family planning Rates of pay Mutual observance clause

Note: In addition, the BLR requires the CBA should include a clear statement of the terms of the CBA. Er’s duty to bargain is limited to mandatory bargaining subjects; as to other matters, he is free to bargain or not.

Q: How are cases arising from the Interpretation or implementation of CBAs handled and disposed? A: They are disposed through the grievance machinery and if not resolved by the grievance machinery, through voluntary arbitration. (1995 Bar Question) Q: What is grievance? A: It is any question by either the employer or the union regarding the interpretation or implementation of any provision of the CBA or interpretation or enforcement of company personnel policies. (Sec.1 [u], Rule I, Book V, IRR) Q: What provisions must the parties include in a CBA? A: 1. Provisions that will ensure the mutual observance of its terms and conditions. 2. A machinery for adjustment and resolution of grievances arising from the: a. Interpretation/implementation of the CBA and

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UST GOLDEN NOTES 2011 b.

Interpretation/ enforcement of company personnel policies. (Art. 260, par. 1).

2. (1)Grievance Procedure

Q: What is grievance machinery? A: It refers to the mechanism for the adjustment and resolution of grievances arising from the interpretation or enforcement of company personnel policies. It is part of the continuing process of collective bargaining (CB). Note: It is a must provision in any CBA and no collective agreement can be registered in the absence of such procedure.

Q: How is grievance machinery established? A: 1. Agreement by the parties 2. A grievance committee – composed of at least 2 representatives each from the members of the bargaining unit and the employer, unless otherwise agreed upon by the parties – shall be created within 10 days from the signing of CBA Note: Although Art. 260 of the Labor Code mentions “parties to a CBA”, it does not mean that a grievance machinery cannot be set up in a CBA‐less enterprise. In any workplace where grievance can arise, a grievance machinery can be established.

Q: What is grievance procedure? A: It refers to the internal rules of procedure established by the parties in their CBA which usually consists of successive steps starting at the level of the complainant and his immediate supervisor and ending, when necessary, at the level of the top union and company officials and with voluntary arbitration as the terminal step. Q: What will happen to grievances submitted to the grievance machinery which are not settled within 7 calendar days from the date of their submission? A: They shall automatically be referred to voluntary arbitration prescribed in the CBA. (Art. 260, par.2, Labor Code) Either party may serve notice upon the other of its decision to submit the issue to voluntary arbitration (VA): 1. If the party upon whom such notice is served fails/refuses to respond within 7

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days from receipt, VA/panel designated in the CBA shall commence arbitration proceedings If the CBA does not designate or if the parties failed to name the VA/panel, the regional branch of NCMB appoints VA/panel

(2)Voluntary Arbitration Q: What is voluntary arbitration? A: It refers to the mode of settling labor management disputes by which the parties select a competent, trained and impartial third person who shall decide on the merits of the case and whose decision is final and executory. (Sec.1 [d], Rule II, NCMB Revised Procedural Guidelines in the Conduct of Voluntary Arbitration Proceedings, Oct. 15, 2004) Q: What is the difference between compulsory and voluntary arbitration? A: Compulsory arbitration is a system whereby the parties to a dispute are compelled by the government to forego their right to strike and are compelled to accept the resolution of their dispute rd through arbitration by a 3 party. The essence of arbitration remains since a resolution of a dispute is arrived at by resort to a disinterested third party whose decision is final and binding on the parties, but in compulsory arbitration, such a third party is normally appointed by the government. Under voluntary arbitration, on the other hand, referral of a dispute by the parties is made, pursuant to a voluntary arbitration clause in their collective agreement, to an impartial third person for a final and binding resolution. Ideally, arbitration awards are supposed to be complied with by both parties without delay, such that once an award has been rendered by an arbitrator, nothing is left to be done by both parties but to comply with the same. After all, they are presumed to have freely chosen arbitration as the mode of settlement for that particular dispute. Pursuant thereto, they have chosen a mutually acceptable arbitrator who shall hear and decide their case. Above all, they have mutually agreed to be bound by said arbitrator's decision. (Luzon Dev’t Bank v. Ass’n of Luzon Dev’t Bank Ees, G.R. No. 120319, Oct. 6, 1995) Q: What is the basis for voluntary arbitration and its rationale? A: The State shall promote the principle of shared responsibility between workers and employers and


LABOR RELATIONS LAW the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace (Sec. 3, Art. XIII, 1987 Constitution). (3)No Strike‐No Lockout Clause Q: When does the No Strike‐No Lockout clause in the CBA apply? A: The “no strike‐no lockout” clause in the CBA applies only to economic strikes. It does not apply to ULP strikes. Hence, if the strike is founded on an unfair labor practice of the employer, a strike declared by the union cannot be considered a violation of the no strike clause. (Master Iron Labor Union v. NLRC, G.R. No. 92009, Feb. 17, 1993) (4)Labor Management Council Q: What is the role of the Department of Labor and Employment in the creation of Labor Management Councils? A: The Department shall promote the formation of labor‐management councils in organized and unorganized establishments to enable the workers to participate in policy and decision‐making processes in the establishment, insofar as said processes will directly affect their rights, benefits and welfare, except those which are covered by collective bargaining agreements or are traditional areas of bargaining. The Department shall promote other labor‐ management cooperation schemes and, upon its own initiative or upon the request of both parties, may assist in the formulation and development of programs and projects on productivity, occupational safety and health, improvement of quality of work life, product quality improvement, and other similar schemes. (Sec. 1, Rule XXI, Book V, IRR) Q: How is the representative in the Management Council Selected? A: In organized establishments, the workers’ representatives to the council shall be nominated by the exclusive bargaining representative. In establishments where no legitimate labor organization exists, the workers representative shall be elected directly by the employees at large. (Sec. 2, Rule XXI, Book V, IRR) c.ULP in Collective Bargaining Q: What are the forms of ULP in bargaining?

A: 1. 2. 3.

4. 5. 6.

Failure to meet and convene Evading the mandatory subjects of bargaining. Bad faith in bargaining (boulwarism), including failure to execute the CBA if requested Gross violation of the CBA Surface Bargaining Blue sky bargaining

Note: Violations of CBA, except those which are gross in character, shall no longer be treated as ULP but a grievance under CBA. (Art. 261, LC, Silva v. NLRC, G.R. No. 110226, June 19 1997)

Q: When is there refusal to bargain? A: A union violates its duty to bargain collectively by entering negotiations with a fixed purpose of not reaching an agreement or signing a contract. Q: What is featherbedding/ make work activities? A: It refers to the practice of the union or its agents in causing or attempting to cause an employer (Er) to pay or deliver or agree to pay or deliver money or other things of value, in the nature of an exaction, for services which are not performed or not to be performed, as when a union demands that the Er maintain personnel in excess of the latter’s requirements. Note: It is not featherbedding if the work is performed no matter how unnecessary or useless it may be.

Q: What is the sweetheart doctrine? A: It is when a LO asks for or accepts negotiations or atty’s fees from employers as part of the settlement of any issue in CB or any other dispute. Note: The resulting CBA is considered as a “sweetheart contract” – a CBA that does not substantially improve the employees wages and benefits and whose benefits are far below than those provided by law.

Q: What is blue‐sky bargaining? A: It is defined as making exaggerated or unreasonable proposals. Note: Whether or not the union is engaged in blue‐sky bargaining is determined by the evidence presented by the union as to its economic demands. Thus, if the union requires exaggerated or unreasonable economic demands, then it is guilty of ULP. (Standard Chartered Bank v. Confessor, G.R. No. 114974, June 16, 2004)

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UST GOLDEN NOTES 2011 Q: When does boulwarism occur?

1.

A: It occurs when employer (Er) directly bargains with the employee (Ee) disregarding the union; the aim was to deal with the labor union through Ees rather than with the Ees thru the union. Er submits its proposals and adopts a take‐it‐or‐leave‐it stand.

2.

d.Unfair Labor Practice (1)ULP of Employers Q: What are the ULP that may be committed by Ers? A: 1. Interference 2. Yellow dog condition 3. Contracting out 4. Company unionism 5. Discrimination for or against union membership 6. Discrimination because of testimony 7. Violation of duty to bargain 8. Paid negotiation 9. Gross violation of CBA (a)Interference Q: What is meant by interference? A: The act of Er to interfere with, restrain or coerce Ees in the exercise of their right to self organization. Q: What is the test of interference? A: Whether the Er has engaged in conduct which, it may reasonably be said, tends to interfere with the free exercise of the Ees right to self‐organization. Note: Direct evidence that an Ee was in fact intended or coerced by the statements of threats of the Er is not necessary if there is a reasonable interference that the anti‐union conduct of the Er does have an adverse effect on self‐organization and CB. (The Insular Life Assurance‐NATU v. The Insular Life Co. Ltd, G.R. No.L‐ 25291, Jan. 30, 1971)

Q: What is the totality of conduct doctrine? A: It states that the culpability of Er’s remarks is to be evaluated not only on the basis of their implications, but against the background of and in conjunction with collateral circumstances. Under this doctrine, expressions of opinion by an Er, though innocent in themselves, frequently were held to be ULP because of:

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3.

The circumstances under which they were uttered The history of the particular Er’s labor relations or anti‐union bias Their connection with an established collateral plan of coercion or interference. (The Insular Life Assurance‐NATU v. The Insular Life Co. Ltd, G.R. No.L‐25291, Jan. 30, 1971)

Q: Phil. Marine Officers Guild (PMOG) is a union representing some of Philsteam’s officers and Cebu Seamen’s Association (CSA) is another union representing some of Philsteam’s officers. PMOG sent a letter to Philsteam requesting for CB but the company asked the former to first prove it represents the majority. Simultaneously, Philsteam interrogated its captains, deck officers and engineers while CSA likewise sent its demands to Philsteam. The company recognized CSA as representing the majority and entered into a CBA. Hence PMOG declared a strike. PMOG was subjected to vilification and Philsteam’s pier superintendent participated in the solicitation of membership for CSA. Is the company guilty of ULP? A: Yes. Although the company is free to make interrogations as to its Ees’ union, the same should be for a legitimate purpose and must not interfere with the exercise of self‐organization otherwise it is considered as ULP. Moreover, Philsteam’s supervisory Ees’ statement that PMOG is a “money‐ making” union, which is made to appear to be said in behalf of the union and the participation of the company’s pier superintendent in soliciting membership for the competing union, is ULP for interfering with the exercise of the right to self‐ organization. (Philsteam and Navigation v. Philippine Marine Officers Guild, G.R. Nos. L‐20667 and L‐20669, Oct. 29, 1965) Q: What is a lockout? A: It means any temporary refusal of an Er to furnish work as a result of an industrial or labor dispute. (Art.212[p]) Q: When does lockout or closure amount to ULP? A: A lockout, actual or threatened, as a means of dissuading the Ees from exercising their rights is clearly an ULP. However, to hold an Er guilty, the evidence must establish that the purpose was to interfere with the Ees exercise of their rights. Q: What are other examples of acts of interference?


LABOR RELATIONS LAW

A: 1. 2.

3.

Outright and unconcealed intimidation In order that interrogation would not be deemed coercive: a. The Er must communicate to the Ee the purpose of questioning b. Assure him that no reprisal would take place c. Obtain Ee participation voluntarily d. Must be free from Er hostility to union organization e. Must not be coercive in nature Intimidating expressions of opinion by Er

Note: An Er who interfered with the right to self‐ organization before a union is registered can be held guilty of ULP. (Samahan ng mga Manggagawa sa Bandolino‐LMLC v. NLRC, G.R. No. 125195, July 17, 1997) It is the prerogative of the company to promote, transfer or even demote its Ees to other positions when the interests of the company reasonably demand it. Unless there are circumstances which directly point to interference by the company with the Ees right to self‐organization, the transfer of an Ee should be considered as within the bounds allowed by law. (Rubberworld Phils. v. NLRC, G.R. No. 75704, July 19, 1989)

(b)Yellow Dog Q: What is a yellow dog condition? A: It is to require as a condition of employment that a person or an Ee shall not join a labor organization or shall withdraw from one to which he belongs. Q: What is a yellow dog contract? A: It is a promise exacted from workers as condition of employment that they are not to belong to or attempt to foster a union during their period of employment. Q: Is yellow dog contract valid? A: No. It is null and void because: 1. It is contrary to public policy for it is tantamount to involuntary servitude. 2. It is entered into without consideration for Ees in waiving their right to self‐ organization. 3. Ees are coerced to sign contracts disadvantageous to their family. Note: This is one of the cases of ULP that may be committed in the absence of an Er‐Ee relationship.

Q: What are the 3 usual provisions under a yellow dog contract? A: 1. A representation by the Ee that he is not a member of a labor union. 2. A promise by the Ee not to join a labor union. 3. A promise by the Ee that upon joining a labor union, he will quit his employment. (c)Contracting Out Q: What is “contracting out” as a form of ULP? A: It is to contract out services or functions being performed by union members when such will interfere with, restrain or coerce Ees in the exercise of their rights to self‐organization. Q: Does it mean that an Er cannot contract out work? A: GR: Contracting out services is not ULP per se. XPNs: It is ULP only when the ff. exists: 1. The services contracted out are being performed by union members; and 2. Such contracting out interferes with, restrains, or coerce Ees in the exercise of their right to self‐organization. Note: When the contracting out is being done for business reasons such as decline in business, inadequacy of equipment or to reduce cost, then it is a valid exercise of management prerogative.

Q: Company "A" contracts out its clerical and janitorial services. In the negotiations of its CBA, the union insisted that the company may no longer engage in contracting out these types of services, which services the union claims to be necessary in the company's business, without prior consultation. Is the union's stand valid or not? For what reason(s)? A: The union's stand is not valid. It is part of management prerogative to contract out any work, task, job or project except that it is an ULP to contract out services or functions performed by union members when such will interfere with, restrain or coerce Ees in the exercise of their rights to self‐organization. (Art. 248[c] of the LC). (2001 Bar Question) Q: What is a run‐away shop?

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UST GOLDEN NOTES 2011 A: It is an industrial plant moved by its owners from one location to another to escape labor regulations or State laws or to discriminate against Ees at the old plant because of their union activities. Q: Is resorting to run‐away shop ULP? A: Yes. Where a plant removal is for business reasons but the relocation is hastened by anti‐union motivation, the early removal is ULP. It is immaterial that the relocation is accompanied by a transfer of title to a new employer (Er) who is an alter ego of the original Er. (d)Company Unionism Q: What is a company union? A: Any labor organization whose formation, function or administration has been assisted by any act defined as ULP. (Art. 212[i]) Q: What are the forms of company unionism? A: 1. Initiation of the company union idea by: a. Outright formation by Er or his representatives b. Ee formation on outright demand or influence by Er and c. Managerially motivated formation by Ees 2. Financial support to the union by: a. Er defrays union expenses b. Pays atty’s fees to the attorney who drafted the Constitution or by‐laws of the union. 3. Er encouragement assistance ‐ Immediately granting of exclusive recognition as bargaining agent without determining whether the union represents the majority of the employees 4. Supervisory assistance‐ Soliciting membership, permitting union activities during work time or coercing Ees to join the union by threats of dismissal or demotion Q: What is meant by the act of company‐ domination of union? A: This is to initiate, dominate, assist or otherwise interfere with the formation or administration of any labor organization including giving of financial

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or other support to it or its organizers or supporters. Q: Why is company unionism/captive unionism a form of ULP? A: It is considered ULP because the officers will be beholden to the Ers and they will not look after the interest of whom they represent. (e)Discrimination for or against union membership Q: What is meant by discrimination as a form of ULP? A: It is to discriminate in regard to wages, hours of work and other terms and conditions of employment in order to encourage or discourage membership in any labor organization. Q: When is a discharge of an Ee discriminatory? A: For the test of determining whether or not a discharge is discriminatory, it is necessary that the underlying reason for the discharge be established. The fact that a lawful cause for discharge is available is not a defense where the Ee is actually discharged because of his union activities. If the discharge is actually motivated by lawful reason, the fact that the Ee is engaged in union activities at the time will lie against the Er and prevent him from the exercise of business judgment to discharge an Ee for cause. (Phil. Metal Foundries Inc. v. CIR, G.R. Nos. L‐34948‐49, May 15, 1979) Q: Jobo has 3 hotels, the Taal Vista Lodge, Manila Hotel and the Pines Hotel. Among the 3, Pines Hotel had more Ees and the only one with a labor organization (LO). When the bonus was distributed among the 3 hotels, Pines Hotel Ees received the least amount compared to the Ees of Manila Hotel and Taal Vista Lodge. Did the company commit ULP? A: Yes. The sharing of the bonuses is discriminatory and such constitute ULP. The Pines Hotel Ees would be receiving fewer bonuses compared to the Ees of Taal Vista Lodge and Manila Hotel where neither has a LO nor does the complainant union has a member. Taking into account that Pines Hotel is realizing profit compared to that of Taal Vista. Same analogy applies in the salary increase. (Manila Hotel Co. v. Pines Hotel Ees’ Ass’n, G.R. No.L‐30139, Sep. 28, 1972) Q: When can there be a valid discrimination?


LABOR RELATIONS LAW A: The employer is not guilty of ULP if it merely complies in good faith with the request of the certified union for the dismissal of employees expelled from the union pursuant to the union security clause in the CBA. (Soriano v. Atienza, G.R. No. L‐68619, Mar. 16, 1989) Q: A profit sharing scheme was introduced by the company for its managers and supervisors who are not members of the union, hence do not enjoy the benefits of the CBA. The respondent union wanted to participate with the scheme but was denied by the company due to the CBA. Subsequently the company distributed the profit sharing to the manager, supervisors and other non‐union member Ees. As a result the union filed a notice of strike alleging ULP. Is the non‐extension of the profit sharing scheme to union members discriminatory and an ULP? A: No. There can be no discrimination when the Ees are not similarly situated. The situation of union members is different and distinct from non‐union members because only union members enjoy the benefit under the CBA. The profit sharing scheme was extended to those who do not enjoy the benefits of the CBA. Hence, there is no discrimination and ULP is not committed. (Wise and Co., Inc. v. NLRC, G.R. No. L‐87672, Oct. 13, 1989) Q: Is dismissal of an Ee pursuant to a union security clause a form of ULP? A: No. Union security clauses in the CBA, if freely and voluntarily entered into, are valid and binding. Thus, the dismissal of an Ee by the company pursuant to a labor union’s demand in accordance with a union security agreement does not constitute ULP. (Malayang Samahan ng mga Manggagawa sa M. Greenfield v. Ramos, G.R. No. 113907, Feb. 28, 2000) A union member who is employed under an agreement between the union and his Er is bound by the provisions thereof since it is a joint and several contract of the members of the union entered into by the union as their agent. (Manalang v. Artex Dev’t, G.R. No. L‐20432, Oct. 30, 1967) Q: Is notice and hearing required in case an Ee is dismissed pursuant to a union security clause? A: Yes. Although a union security clause in a CBA may be validly enforced and dismissal pursuant to thereto may likewise be valid, this does not erode the fundamental requirement of due process. The reason behind the enforcement of union security clauses which is the sanctity and inviolability of contracts cannot erode one’s right to due process.

Notwithstanding the fact that the dismissal was at the instance of the federation and that it undertook to hold the company free from any liability resulting from such dismissal, the company may still be held liable if it was remiss in its duty to accord the would‐be dismissed Ees their right to be heard on the matter. Q: Mabeza and her co‐Ees were asked by the company to sign an affidavit attesting to the latter’s compliance with pertinent labor laws. Mabeza signed the affidavit but refused to swear to its veracity before the City prosecutor. Mabeza then filed a LOA which was denied by management. After sometime, she attempted to return to work but the company informed her not to report for work and continue with her unofficial leave. Did the company commit ULP? A: Yes. The act of compelling an Ee to sign an instrument indicating the Er’s compliance with Labor laws which the company might have violated together with the act of terminating or coercing those Ees to cooperate is an act of ULP. This is analogous with Art. 248 (f) of the LC which provides: “to dismiss, discharge or otherwise prejudice or discriminate against an Ee for having given or being about to give testimony under this Code”. For in not giving a positive testimony in favor of the Er, Mabeza reserved not only her right to dispute the claim but also to work for better terms and condition. (Mabeza v. NLRC, G.R No. 118506, April 18, 1997) (f)Violation of Duty to Bargain Q: What is violation of the duty to bargain as a kind of ULP? A: This is the act of violating the duty to bargain collectively as prescribed in the LC. Q: What are the forms of ULP in bargaining? A: 1. Failure or refusal to meet and convene 2. Evading the mandatory subject of bargaining 3. Bad faith (BF) bargaining, including failure to execute the CBA if requested 4. Gross violation of the CBA Note: A company’s refusal to make counter‐proposal, if considered in relation to the entire bargaining process, may indicate BF and this is especially true where the union’s request for a counter proposal is left unanswered. (Kiok Loy v. NLRC, G.R. No. L‐54334, Jan. 22, 1986)

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UST GOLDEN NOTES 2011 Q: What are the examples of ULP in bargaining? A: 1. Delaying negotiations by discussing unrelated matters 2. Refusal to accept request to bargain 3. Rejecting a union’s offer to prove its majority claim 4. Shutdown to avoid bargaining 5. Engaging in surface bargaining Q: Balmar Farms Ees Association (BFEA) is affiliated with Associated Labor Union (ALU). ALU won in the certification election held in the company. Thus, ALU sent its proposal for a CBA, but the company refused to act on it alleging that BEA is the sole and exclusive bargaining representative and that BFEA through its president had sent a letter informing the company of its disaffiliation with ALU. Is the company guilty of ULP for refusing to bargain collectively? A: Yes. ALU is the certified exclusive bargaining representative after winning the certification election. The company merely relied on the letter of disaffiliation by BFEA’s president without proof and consequently refusing to bargain collectively constitutes ULP. Such refusal by the company to bargain collectively with the certified exclusive bargaining representative is a violation of its duty to collectively bargain which constitutes ULP. (Balmar Farms v. NLRC, G.R. No.73504, Oct. 15, 1991)

being a majority union. (1997 Bar Question)

Q: The Kilusang Kabisig, a newly‐formed labor union claiming to represent a majority of the workers in the Microchip Corp., proceeded to present a list of demands to the management for purposes of collective bargaining (CB). The Microchips Corp., a multinational corp.engaged in the production of computer chips for export, declined to talk with the union leaders, alleging that they had not as yet presented any proof of majority status. The Kilusang Kabisig then charged Microchip Corp. with ULP, and declared a "wildcat" strike wherein means of ingress and egress were blocked and remote and isolated acts of destruction and violence were committed. Was the company guilty of an ULP when it refused to negotiate with the Kilusang Kabisig?

Note: All the ULP acts must have a relation to the Ees exercise of their right to self‐organization. Anti‐union or anti‐organization motive must be proved because it is a definitional element of ULP.

A: No. It is not an ULP not to bargain with a union which has not presented any proof of its majority status. The LC imposes on an Er the duty to bargain collectively only with a legitimate labor organization designated or selected by the majority of the Ees in an appropriate CB unit. It is not a ULP for an Er to ask a union requesting to bargain collectively that such union first show proof of its

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Q: What is surface bargaining? A: It is the act of going through the motions of negotiating without any legal intent to reach an agreement. It involves the question of whether or not the Ers conduct demonstrates an unwillingness to bargain in good faith or is merely hard bargaining. (Standard Chartered Bank v. Confessor, G.R. No. 114974, June 16, 2004) Note: Occurs when the Er constantly changes its position over the agreement.

(g)Paid Negotiation Q: What is meant by paid negotiation as a form of ULP? A: It is the act of the employer to pay negotiation or atty’s fees to the union or its officers or agents as part of the settlement of any issue in collective bargaining or any other dispute. (h)Gross Violation of CBA Q: When is the violation of CBA considered as ULP? A: Only when the violation is gross – There must be a flagrant and/or malicious refusal to comply with the economic provision of the CBA.

If violation is not gross, it is not ULP but a grievance under CBA. The “grossly violate” phrase is an amendment by R.A. 6715.

Q: A complaint for ULP was filed by a prosecutor of the CIR against Alhambra company, upon the charges of the union that 15 of its members employed as drivers and helpers are discriminated for being deprived of the benefits under the CBA with no justifiable reason other than union membership. Is the company guilty of ULP? A: Yes. The refusal to extend the benefits and privileges under the CBA to Ees constitutes ULP. Failure on the part of the company to live up in good faith to the terms of the CBA is a serious violation of the duty to collectively bargain which again amounts to ULP. The 15 drivers and helpers are found to be Ees of the company, hence, the benefit and privileges under the CBA should be


LABOR RELATIONS LAW extended to them. (Alhambra Industries v. CIR, G.R. No. L‐25984, Oct. 30, 1970) Q: What are the reliefs available in ULP cases? A: The following reliefs may be availed of: 1. Cease and desist order 2. Affirmative order 3. Court may order the employer to bargain. CBA may be imposed. 4. Strike by union members Note: ULP cases are not subject to compromise in view of the public interest involve. The relation between capital and labor is not merely contractual. They are impressed with public interest that labor contracts must yield to common good.

Q: Is the commission of an ULP by an employer subject to criminal prosecution? A: Yes, because ULPs are not only violations of the civil rights of both labor and management but are also criminal offenses against the State which shall be subject to prosecution and punishment. (Art. 247 LC; See also B.P. Blg. 386 as amended by R.A. 6715). However, the criminal aspect can only be filed when the decision of the labor tribunals, finding the existence of ULP, shall have become final and executory. (2005 Bar Question) (2)ULP of Labor Organizations Q: What are the ULP of LOs? A: It shall be ULP for a LO, its officers, agents or representatives: 1.

2.

3.

4.

To restrain or coerce Ees in the exercise of their rights to self‐organization. However, a LO shall have the right to prescribe its own rules with respect to the acquisition or retention of membership To cause or attempt to cause an Er to discriminate against an Ee, including discrimination against an Ee with respect to whom membership in such organization has been denied or to terminate an Ee on any ground other than the usual terms and conditions under which membership or continuation of membership is made available to other members To violate the duty, or refuse to bargain collectively with the Er, provided it is the representative of the Ees To cause or attempt to cause an Er to pay or deliver or agree to pay or deliver any money or other things of value, in the

5.

nature of an exaction, for services which are not performed or not to be performed, including the demand for fee for union negotiations To ask for or accept negotiations or atty’s fees from Ers as part of the settlement of any issue in collective bargaining (CB) or any other dispute or To violate a CBA.

6. Q: Is interference by a LO an ULP? A: No, because interference by a LO in the exercise of the right to organize is itself a function of self‐ organizing. Q: What are examples of interference which does not amount to ULP? A: 1. Union campaigns for membership even among members of another union 2. Filing by a union of a petition to dislodge an incumbent bargaining union 3. A bargaining union, through a union security clause, requires an incoming employee to join the union. Q: May a union coerce Ees to join a strike? A: No. A union violates the law when, to restrain or coerce non‐strikers from working during the strike, it: 1. Assaults or threatens to assault them 2. Threatens them with the loss of their jobs 3. Blocks their ingress to or egress from the plant 4. Damages non‐strikers’ automobiles or forces them off the highway 5. Physically preventing them from working 6. Sabotages the Er’s property in their presence, thereby creating an atmosphere of fear or violence 7. Demonstrates loudly in front of a non‐ strikers’ residence with signs and shouts accusing the non‐striker of “scabbing” 8. Holding the non striker up to ridicule 9. Seeking public condemnation of the non‐ striker Q: What is a case of union induced discrimination by labor organization (LO)? A: This pertains to the arbitrary use of union security clause. A union member may not be expelled from the union, and consequently from his job, for personal

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UST GOLDEN NOTES 2011 and impetuous reasons or for causes foreign to the closed shop agreement. (Manila Mandarin Ees Union v. NLRC, G.R. No. 76989, Sep. 29, 1987) Labor unions are not entitled to arbitrarily exclude qualified applicants for membership and a closed‐ shop applicants provision will not justify the employer in discharging, or a union in insisting upon the discharge of an employee whom the union thus refuses to admit to membership without any reasonable ground thereof. (Salunga v. CIR, G.R. No. L‐22456, Sep. 27, 1967) Q: When is there refusal to bargain? A: A union violates its duty to bargain collectively by entering negotiations with a fixed purpose of not reaching an agreement or signing a contract. 3.RIGHT TO PEACEFUL CONCERTED ACTIVITIES Q: What is the constitutional basis of strikes, lockouts and other concerted activities? A: The State shall guarantee the rights of all workers to self‐organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law (Sec. 3, Art. XIII, 1987 Constitution). Note: The law does not look with favor upon strikes and lockouts because of their disturbing and pernicious effects upon the social order and the public interests; to prevent or avert them and to implement Sec. 6, Art. XIV of the Constitution, the law has created several agencies, namely: the BLR, the DOLE, the Labor Management Advisory Board, and the CIR. (Luzon Marine Dev’t Union v. Roldan, G.R. No. L‐2660, May 30, 1950)

Q: What is a concerted action? A: It is an activity undertaken by 2 or more employees, by one on behalf of the others. Q: Are all concerted actions strikes? A: Not all concerted activities are strikes. They may only be protest actions – they do not necessarily cause work stoppage by the protesters. A strike in contrast is always a group action accompanied by work stoppage. Q: The Ees wrote and published a letter to the bank president, demanding his resignation on the grounds of immorality, nepotism, favoritism and discrimination in the appointment and promotion of bank Ees. The bank dismissed the 8 Ees on the alleged libelous letter. Were the Ees engaged in a concerted activity?

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A: Yes, assuming that they acted in their individual capacities when they wrote the letter, they were nonetheless protected, for they were engaged in a concerted activity, in their right of self‐organization that includes concerted activity for mutual aid and protection. Any interference made by the company will constitute as ULP. The joining in protests or demands, even by a small group of Ees, if in furtherance of their interests as such is a concerted activity protected by the Industrial Peace Act. It is not necessary that union activity be involved or that collective bargaining be contemplated. (Republic Savings Bank v. CIR, G.R. No. L‐20303, Oct. 31, 1967) Q: What is a strike? A: It means any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute. (Sec.1 [uu], Rule I, Book V, IRR) It shall comprise not only concerted work stoppages, but also slowdowns, mass leaves, sitdowns, attempt to damage, destroy or sabotage plant equipment and facilities, and similar activities. (Samahang Manggagawa sa Sulpicion Lines v. Sulpicio Lines, Inc., G.R. No. 140992, Mar. 25, 2004) Q: What is the purpose of a strike? A: A strike is a coercive measure resorted to by laborers to enforce their demands. The idea behind a strike is that a company engaged in a profitable business cannot afford to have its production or activities interrupted, much less, paralyzed. (Phil. Can Co. v. CIR, G.R. No. L‐3021, July 13, 1950) Q: What is a lockout? A: It means any temporary refusal of an employer to furnish work as a result of an industrial or labor dispute. (Art. 212 [p]) Q: What is picketing? A: It is the act of marching to and fro the employers premises which is usually accompanied by the display of placard and other signs, making known the facts involved in a labor dispute. The right to picket as a means of communicating the facts of a labor dispute is a phase of the freedom of speech guaranteed by the Constitution. If peacefully carried out, it can not be curtailed


LABOR RELATIONS LAW even in the absence of Er‐Ee relationship. (PAFLU v. Cloribel, G.R. No. L‐25878, Mar. 28, 1969) Q: Is the right to picket an absolute right? A: No, while peaceful picketing is entitled to protection as an exercise of free speech, the courts are not without power to confine or localize the sphere of communication or the demonstration to the parties to the labor dispute, including those with related interests, and to insulate establishments or persons with no industrial connection or having interest totally foreign to the context of the dispute. (Liwayway Pub., Inc. v. Permanent Concrete Workers Union, G.R. No. L‐ 25003, Oct. 23, 1981) The right to peaceful picketing shall be exercised by the workers with due respect for the rights of others. No person engaged in picketing shall commit any act of violence, coercion or intimidation. Stationary picket, the use of means like placing of objects to constitute permanent blockade or to effectively close points of entry or exit in company premises are prohibited by law. Q: Who is a strike‐breaker? A: Any person who obstructs, impedes, or interferes with by force, violence, coercion, threats, or intimidation any peaceful picketing affecting wages, hours or conditions of work or in the exercise of the right of self‐organization or collective bargaining. (Art. 212 [r]) Q: What is a strike area? A: It means the establishment, warehouses, depots, plants or offices, including the sites or premises used as runaway shops, of the Er struck against, as well as the immediate vicinity actually used by picketing strikers in moving to and fro before all points of entrance to and exit from said establishment. (Sec. 1 [vv], Rule I, Book V, IRR) Q: What is an internal union dispute? A: It includes all disputes or grievances arising from any violation of or disagreement over any provision of the constitution and by laws of a union, including any violation of the rights and conditions of union membership provided for in this LC. (Art. 212 [q]) Q: What is a boycott? A: It is an attempt, by arousing a fear of loss, to coerce others, against their will to withhold from one denominated “unfriendly to labor” their beneficial business intercourse.

Q: What is a slowdown? A: It is a method by which one’s employees, without seeking a complete stoppage of work, retard production and distribution in an effort to compel compliance by the employer with the labor demands made upon him. Q: Does an “overtime boycott” or “work slowdown” by the employees constitute a strike and hence a violation of the CBA’s “No strike, no lockout” clause? A: Yes, the concept of a slowdown is a "strike on the installment plan." It is a willful reduction in the rate of work by concerted action of workers for the purpose of restricting the output of the employer (Er), in relation to a labor dispute; as an activity by which workers, without a complete stoppage of work, retard production or their performance of duties and functions to compel management to grant their demands. Such a slowdown is generally condemned as inherently illicit and unjustifiable, because while the employees (Ees) "continue to work and remain at their positions and accept the wages paid to them," they at the same time "select what part of their allotted tasks they care to perform of their own volition or refuse openly or secretly, to the Er's damage, to do other work;" in other words, they "work on their own terms." (Interphil Laboratories Ees Union‐FFW v. Interphil Laboratories, Inc., G.R. No. 142824, Dec. 19, 2001) Q: What are the characteristics of a strike? A: 1. Existence of an Er‐Ee relationship 2. Existence of a labor dispute 3. Employment relation is deemed to continue although in a state of belligerent suspension 4. Temporary work stoppage 5. Work stoppage is done through concerted action 6. The striking group is a legitimate labor organization; in case of a bargaining deadlock, it must be the employees’ sole bargaining representative Q: PAL dismissed strike leader Capt. Gaston as a result of which the Union resolved to undertake the grounding of all PAL planes and the filing of applications for “protest retirement” of members who had completed 5 years of continuous service, and “protest resignation” for those who had rendered less than 5 years of service in the company. PAL acknowledged receipt of said letters and among the pilots whose “protest

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UST GOLDEN NOTES 2011 resignation or retirement” was accepted by PAL were Enriquez and Ecarma. Before their readmission, PAL required Enriquez and Ecarma to accept 2 conditions, namely: that they sign conformity to PAL’s letter of acceptance of their retirement and or resignation and that they submit an application for employment as new employees (Ees) without protest or reservation. As a result of this their seniority rights were lost. Are the pilots entitled to the restoration of their seniority rights? A: No, an Ee has no inherent right to seniority. He has only such rights as may be based on a contract, statute, or an administrative regulation relative thereto. Seniority rights which are acquired by an Ee through long‐time employment are contractual and not constitutional. The discharge of an Ee thereby terminating such rights would not violate the Constitution. When the pilots tendered their respective retirement or resignation and PAL immediately accepted them, both parties mutually terminated the contractual employment relationship between them thereby curtailing whatever seniority rights and privileges the pilots had earned through the years. Q: Does the action of the Ees of PAL fall under the ambit of concerted actions protected by law? A: No, the pilot’s mass action was not a strike because Ees who go on strike do not quit their employment. Ordinarily, the relationship of Er and Ee continues until one of the parties acts to sever the relationship or they mutually act to accomplish that purpose. As they did not assume the status of strikers, their “protest retirement/resignation” was not a concerted activity which was protected by law. (Enrique v. Zamora, G.R. No. L‐51382, Dec. 29, 1986) Q: What is a labor dispute? A: Any controversy or matter concerning terms or conditions or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether or not the disputants stand in the proximate relation of Ers and Ees. (Gold City Integrated Port Services, Inc. v. NLRC, G.R. No. 103560, July 6, 1995) Q: When is a person or entity considered as participating or interested in a labor dispute? A:

160

1. 2.

3. 4.

If relief is sought against him or it, and He or it is engaged in the same industry, trade, craft, or occupation in which such dispute occurs, or Has a direct or indirect interest therein, or Is a member, officer, or agent of any association composed in whole or in part of employees or employers engaged in such industry, trade, craft, or occupation.

Q: Liwayway Publication Inc. is a second sub lessee of a part of the premises of the Permanent Concrete Products, Inc. It has a bodega for its newsprint in the sublet property which it uses for its printing and publishing business. The daily supply of newsprint needed to feed its printing plant is taken from its bodega. The Ees of the Permanent Concrete Products Inc. declared a strike against their company. The union members picketed, stopped and prohibited Liwayway’s trucks from entering the compound to load newsprint from its bodega. Does the lower court have jurisdiction to issue a writ of preliminary injunction considering that there was a labor dispute between Permanent Concrete Products, Inc. and the union? A: Yes, Liwayway Publication Inc. is not in anyway related to the striking union except for the fact that it is the sub‐ lessee of a bodega in the company’s compound. The business of Liwayway is exclusively the publication of magazines which has absolutely no relation or connection whatsoever with the cause of the strike of the union against their company, much less with the terms, conditions or demands of rd the strikers. Liwayway is merely a 3 person or an innocent by‐stander. (Liwayway Pub., Inc. v. Permanent Concrete Workers Union, G.R. No. L‐ 25003, Oct. 23, 1981) Q: Because of financial problems, the company decided to temporarily shutdown its operations at the dyeing and finishing division. It notified the DOLE of the shutdown. Raymund Tomaroy with 16 members of the union staged a picket in front of the company’s compound, carrying placards. He th demanded a resumption of work and 13 month pay. The company filed a petition to declare the strike illegal. The union argues that they did not stage a strike, for considering that the dyeing and finishing division of the company was shut down, it could not have caused a work stoppage. Was the action of the union a strike?


LABOR RELATIONS LAW A: Yes, the concerted efforts of the members of the union and its supporters caused a temporary work stoppage. The allegation that there can be no work stoppage because the operation in the division had been shut down is of no consequence. It bears stressing that the other divisions were fully operational. (Bukluran ng Manggagawa sa Clothman Knitting Corp. v. CA, G.R. No. 158158, Jan.17, 2005)

existence of the union is threatened. It must still observe the mandatory 7‐day strike ban period before it can stage a valid strike

Q: What are the different forms of strike? A: 1.

a.Forms of Concerted Activities Q: What are the types of strike?

2.

A: 1.

2.

Economic strike – used to secure the economic demands such as higher wages and better working conditions for the workers ULP strike – protest against ULP of management

3.

Q: Distinguish between an economic strike and an ULP strike. A: ULP STRIKE As to nature Involuntary strike; the LO is forced to go on strike because Voluntary strike of the ULP committed against because the Ee will them by the Er. It is an act of declare a strike to self‐defense since the Ee’s are compel being pushed to the wall and management to their only remedy is to stage a grant its demands strike Who will initiate The CB agent of the appropriate Either the CB agent or the LLO in bargaining unit can behalf of its members declare an economic strike As to the cooling‐off period 30 days from notice of strike before the 15 days from the filing of the intended date of notice of strike actual strike subject to the 7‐ day strike ban As to the exception to the cooling‐off period No exception – The cooling‐off period may be mandatory dispensed with, and the union may take immediate action in case of dismissal from Note: notice of employment of their officers strike and strike duly elected in accordance with vote may be the union’s constitution and by‐ dispensed with; laws, which may constitute they may strike union busting where the immediately

4.

ECONOMIC STRIKE

5.

6.

7.

Legal Strike‐one called for a valid purpose and conducted through means allowed by law. Illegal Strike‐one staged for a purpose not recognized by law, or if for a valid purpose, conducted through means not sanctioned by law. Economic Strike‐ one staged by workers to force wage or other economic concessions from the employer which he is not required by law to grant (Consolidated Labor Association of the Phil. vs. Marsman, G.R. No. L‐ 17038, July 31, 1964) ULP Strike‐one called to protest against the employer’s acts of unfair practice enumerated in Article 248 of the Labor Code, as amended, including gross violation of the collective bargaining agreement (CBA) and union busting. Slow Down Strike‐one staged without the workers quitting their work but by merely slackening or by reducing their normal work output. Wild‐Cat Strike‐one declared and staged without filing the required notice of strike and without the majority approval of the recognized bargaining agent. Sit Down Strike‐one where the workers stop working but do not leave their place of work. b.Who may declare a strike or lockout

Q: Who may declare a strike or lockout? A: 1.

2.

Any certified or duly recognized bargaining representative may declare a strike in cases of bargaining deadlock and unfair labor practice. Likewise, the employer may declare a lockout in the same cases. In the absence of a certified or duly recognized bargaining representative, any legitimate labor organization in the establishment may declare a strike but only on the ground of unfair labor practice. (Section 2, Rule XIII Book V,

161


UST GOLDEN NOTES 2011 Omnibus Rules Implementing The Labor Code, as amended).

In case of dismissal from employment of union officers which may constitute union busting, the time requirement for the filing of the Notice of Strike shall be dispensed with but the strike vote requirement, being mandatory in character, shall “in every case” be complied with.

c.Requisites for a valid strike/ lockout Q: What are the requisites of a lawful strike / lockout? A: The requirements for a valid strike or lockout are as follows: 1. It must be based on a valid and factual ground; 2. A strike or lockout NOTICE shall be filed with the National Conciliation and Mediation Board (NCMB) at least 15 days before the intended date of the strike or lockout if the issues raised are unfair labor practices, or at least 30 days before the intended date thereof if the issue involves bargaining deadlock. 3. In cases of dismissal from employment of union officers duly elected in accordance with the union constitution and by‐laws, which may constitute UNION BUSTING where the existence of the union is threatened, the 15‐day cooling‐off period shall not apply and the union may take action immediately after the strike vote is conducted and the result thereof submitted to the Department of Labor and Employment. 4.

A strike must be approved by a majority vote of the members of the Union and a lockout must be approved by a majority vote of the members of the Board of Directors of the Corporation or Association or of the partners in a partnership, obtained by secret ballot in a meeting called for that purpose.

5.

A strike or lockout VOTE shall be reported to the NCMB‐DOLE Regional Branch at least 7 days before the intended strike or lockout subject to the cooling‐off period.

6.

In the event the result of the strike/lockout ballot is filed within the cooling‐off period, the 7‐day requirement shall be counted from the day following the expiration of the cooling‐off period. (NSFW vs. Ovejera, G.R. No. 59743, May 31, 1982)

162

7.

The dispute must not be the subject of an assumption of jurisdiction by the President or the Secretary of Labor and Employment, a certification for compulsory arbitration, or submission to compulsory or voluntary arbitration nor a subject of a pending case involving the same grounds for the strike or lockout.

Q: What are the valid grounds for declaring a strike or lockout? A: The law recognizes 2 grounds for the valid exercise of the right to strike or lockout, namely: 1. Collective Bargaining Deadlock (CBD)‐ economic; 2. Unfair Labor Practice (ULP)‐political Note: It is possible to change an economic strike into a ULP strike. (Consolidated Labor Ass’n of the Phils. v. Marsman and Co., G.R. No. L‐17038, July 31, 1964) Violations of CBA must be gross to be considered as ULP.

Q: What is conversion doctrine? A: It is when a strike starts as economic and later, as it progresses, it becomes a ULP, or vice versa. Q: Can a strike be converted into a lockout? A: No, a strike cannot be converted into a pure and simple lockout by the mere expedient of filing before the trial court a notice of offer to return to work during the pendency of the labor dispute between the union and the employer. (Rizal Cement Workers Union v. CIR, G.R. No. L‐18442, Nov. 30, 1962). Q: Give examples of strike and explain their legality. A: 1. Sit‐down strike – Characterized by a temporary work stoppage of workers who seize or occupy property of the Er or refuse to vacate the premises of the Er.


LABOR RELATIONS LAW Illegal – Amounts to a criminal act because of the Ee’s trespass on the premises of the Er 2.

3.

4.

5.

Wildcat strike – A work stoppage that violates the labor contract and is not authorized by the union. Illegal –Because it fails to comply with certain req’ts of the law, to wit: notice of strike, vote and report on strike vote Slowdown – Strike on an installment plan; an activity by which workers, without complete stoppage of work, retard production or their performance of duties and functions to compel management to grant their demands Illegal – Ees work on their own terms; while the Ees continue to work and remain in their positions and accept wages paid to them, they at the same time select what part on their allotted tasks they care to perform on their own volition or refuse openly or secretly Sympathetic strike – Work stoppages of workers of one company to make common cause with other strikers or other companies without demands or grievances of their own against the Er Illegal – There is no labor dispute between the workers who are joining the strikers and the latter’s Er Secondary strike – Work stoppages of workers of one company to exert pressure on their Er so that the latter will in turn bring pressure upon the Er of another company with whom another union has a labor dispute Illegal – There is no labor dispute involved. Note: A strike can validly take place only in the presence of and in relation to a labor dispute between Er and Ee.

6.

Welga ng bayan (Cause Oriented Strikes) – A political strike and therefore there is neither a bargaining deadlock nor any ULP

Illegal – It is a political rally 7. Quickie strikes‐ brief and unannounced temporary work stoppage Illegal‐ failure to comply with notice requirements and etc. Q: Two unions, joined a welga ng bayan. The unions, led by their officers, staged a work stoppage which lasted for several days, prompting FILFLEX and BIFLEX Corporations to file a petition to declare the work stoppage illegal for failure to comply with procedural req’ts. Whether the Ees committed an illegal work stoppage? A: Yes. Ees, who have no labor dispute with their Er but who, on a day they are scheduled to work, refuse to work and instead join a welga ng bayan commit an illegal work stoppage. There being no showing that the two unions notified the corporations of their intention, or that they were allowed by the corporations, to join the welga ng bayan, their work stoppage is beyond legal protection.(BIFLEX Phils. Inc. Labor Union (NAFLU) vs. FILFLEX Industrial and Manufacturing Corp., G.R. No. 155679, Dec. 19, 2006) Q: What are the tests in determining the legality of strike? A: The following must concur: 1. Purpose test – the strike must be due to either bargaining deadlock and/or the ULP 2. Compliance with the procedural and substantive req’ts of the law. (See requisites of a valid strike) 3. Means employed test – It states that a strike may be legal at its inception but eventually be declared illegal if the strike is accompanied by violence which is widespread, pervasive and adopted as a matter of policy and not mere violence which is sporadic which normally occur in a strike area. Q: What are the instances when a strike or lockout cannot be declared? A: Non‐strikable issues: 1. CBA violations not gross in character 2. Grounds involving inter/intra‐union disputes 3. When there is no notice of strike or lockout or without the strike or lockout vote

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UST GOLDEN NOTES 2011 4. 5.

6.

After assumption of jurisdiction by the SLE After certification or submission of dispute to compulsory or voluntary arbitration or during the pendency of cases involving the same grounds for strike or lockout Labor standards cases such as wage orders. (Guidelines governing Labor Relations [Oct. 19, 1987] issued by Sec. Drilon. See also Art. 261, LC)

Q: What are the procedural and substantive requisites before a strike may be declared? A: 1. Notice of strike – filed with the NCMB taking into consideration the cooling‐off period Note: The failure of the union to serve the company a copy of the notice of strike is a clear violation of Section 3, Rule XXII, Book V of the Rules Implementing the LC. The Constitutional precepts of due process mandate that the other party be notified of the adverse action of the opposing party. (Filipino Pipe and Foundry Corp. v. NLRC, G.R. No. 115180, Nov.r 16, 1999)

2.

3.

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30/15 day Cooling‐off period before the intended date of actual strike – notice of strike is filed with the NCMB taking into consideration the cooling‐off period, at least: a. 30 days before the intended strike for bargaining deadlocks; b. 15 days before the intended strike for ULP Strike vote a. The decision to declare a strike must be approved by a majority of the total union membership in the bargaining unit concerned. b. It must be obtained by secret ballot through meetings or referenda called for the purpose. c. Its purpose is to ensure that the intended strike is a majority decision. The report on the strike vote must be submitted to DOLE at least 7 days before the intended strike subject to the cooling‐off period. d. The regional branch may supervise the conduct of the secret balloting at

4.

5.

its own initiative or upon request of any party. Furnish the regional branch of the NCMB with a notice to conduct a strike vote, at least 24‐hours before the meeting for such purpose (Sec. 10, Rule XXII of the Omnibus Rules of the NLRC). 7‐Day strike ban – a 7‐day waiting period before the date of the purported strike (within which the union intending to conduct a strike must at least submit a report to DOLE as to the result of the strike vote) Note: To give DOLE an opportunity to verify whether the projected strike really carries the imprimatur of the majority of the union members in addition to the cooling‐off period before the actual strike. (Lapanday Workers’ Union, et.al. v. NLRC, G.R. Nos. 95494‐97, Sep. 7, 1995)

Q: What is a cooling‐off period? A: It is the period of time given the NCMB to mediate and conciliate the parties. It is the span of time allotted by law for parties to settle their disputes in a peaceful manner before staging a strike or lockout. Note: Cooling‐off and waiting period may be done simultaneously.

Q: What is the effect of non‐compliance with the requisites of a strike? A: The strike may be declared illegal. Q: What is the purpose of giving notice of the conduct of a strike vote to the NCMB at least 24 hours before the meeting for the said purpose? A: 1. Inform the NCMB of the intent of the union to conduct a strike vote; 2. Give the NCMB ample time to decide on whether or not there is a need to supervise the conduct of the strike vote to prevent any acts of violence and or irregularities; 3. Ample time to prepare for the deployment of the requisite personnel. (Capitol Medical Center v. NLRC, G.R. No. 147080, April 26, 2005) Q: Is a no strike/lockout clause legal?


LABOR RELATIONS LAW A: Yes, but it is applicable only to economic strikes, not ULP strikes. As a provision in the CBA, it is a valid stipulation although the clause may be invoked by an employer (Er) only when the strike is economic in nature or one which is conducted to force wage or other concessions from the Er that are not mandated to be granted by the law itself. It would be inapplicable to prevent a strike which is grounded on ULP. (Panay Electric Co. v. NLRC, G.R. No. 102672, Oct. 4, 1995; Malayang Samahan ng mga Manggagawa sa Greenfield v. Ramos, G.R. No. 113907, Feb. 28, 2000) Q: What is a preventive mediation case? A: It involves labor disputes which are the subject of a formal or informal request for conciliation and mediation assistance sought by either or both parties or upon the initiative of the NCMB. (Sec. 1 [mm], Rule I, Book V, IRR) Note: The regional branch may treat the notice as preventive mediation case upon agreement of the parties.

Q: What are the contents of the notice of strike or lockout? A: 1. Name and addresses of Er 2. Union involved 3. Nature of the industry to which the Er belongs 4. Number of union members 5. Workers in the bargaining unit 6. Other relevant date 7. In case of bargaining deadlocks: unresolved issues, written proposals of the union, counter‐proposals of the Er and proof of request for conference to settle differences 8. In case of ULP: The acts complained of, and the efforts taken to resolve the dispute Note: NCMB shall inform the concerned party in case notice does not conform with the req’ts.

Q: What action will the board take on the notice of strike of strike or lockout? A: 1. Upon receipt of notice, the regional branch of the Board shall exert all efforts at mediation and conciliation to enable the parties to settle the dispute amicably. It shall also encourage the parties to submit the dispute to voluntary arbitration.

2.

3.

4.

The regional branch of the NCMB may, upon agreement of the parties, treat a notice as a preventive mediation case. During the proceedings, the parties shall not do any act which may disrupt or impede the early settlement of the dispute. They are obliged, as part of their duty to bargain collectively in good faith and to participate fully and promptly in conciliation meetings called by the regional branch of the NCMB. A notice, upon agreement of the parties, may be referred to alternative modes of dispute resolution, including voluntary arbitration.

Q: Was the strike held by the union legal based on the fact that the notice of strike only contained general allegations of ULP? A: No. Rule XIII Sec. 4 Book V of the Implementing Rules of the LC provides: In cases of ULP, the notice of strike shall as far as practicable, state the acts complained of and the efforts to resolve the dispute amicably. (Tiu v. NLRC, G.R. No. 123276, Aug. 18, 1997) Q: NFSW, the bargaining agent of Central Azucarera de la Carlota (CAC) rank and file employees, filed a notice of strike based on non‐ th payment of the 13 month pay and 6 days thereafter they held the strike. A day after the commencement of the strike, a report of the strike‐vote was filed by NFSW with MOLE. CAC filed a petition to declare the strike illegal due to non‐compliance with the 15‐day cooling of period and the strike was held before the lapse of 7 days from the submission to the MOLE of the result of the strike vote. Was the strike held by NFSW legal? A: No. The cooling‐off period in Art. 264(c) and the 7‐day strike ban after the strike‐vote report prescribed in Art. 264 (f) were meant to be mandatory. The law provides that “the labor union may strike” should the dispute “remain unsettled until the lapse of the requisite number of days from the filing of the notice”, this clearly implies that the union may not strike before the lapse of the cooling‐off period. The cooling‐off period is for the Ministry of Labor and Employment to exert all efforts at mediation and conciliation to effect a voluntary settlement. The mandatory character of the 7‐day strike ban is manifest in the provision that “in every case” the union shall furnish the MOLE with the results of the voting “at least 7 days before the intended strike.” This period is to give time to verify that a strike vote

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UST GOLDEN NOTES 2011 was actually held. (NFSW v. Ovejera, G.R. No. L‐ 59743, May 31, 1982) Q: Fil Transit Ees Union filed a notice of strike with the BLR because of alleged ULP of the company. Because of failure to reach an agreement the union went on strike. Several employees (Ees) were dismissed because of the strike. The union filed another notice of strike alleging ULP, massive dismissal of officers and members, coercion of Ees and violation of workers rights to self‐ organization. The Ministry of Labor and Employment, after assuming jurisdiction over the dispute, ordered all striking Ees including those who were dismissed to return to work. The company however countered that no strike vote had been obtained before the strike was called and the result of the strike vote was not reported to Ministry of Labor and Employment. Was the strike held by the union illegal for failure to hold a strike vote? A: Yes, there is no evidence to show that a strike vote had in fact been taken before a strike was called. Even if there was a strike vote held, the strike called by the union was illegal because of non‐observance by the union of the mandatory 7‐ day strike ban counted from the date the strike vote should have been reported to the DOLE. (First City Interlink Transportation Co., Inc. v. Confessor, G.R. No. 106316, May 5, 1997) Q: The company conceived and decided to retrench its Ees and selected about 40 Ees to be dismissed because of the lack of work. Because of this about 200 Ees during break‐time boarded buses and went to the Ministry of Labor but they were advised to return to work. Upon returning to the company’s premises, the Ees were only allowed to stay in the canteen and were not given work because according to the company the machines were undergoing repairs. Are the Ees entitled to reinstatement and backwages? A: The Ees are entitled to reinstatement but not to backwages. Both parties being in pari delicto, having conducted an illegal strike and lockout respectively, there must be a restoration of the status quo ante and must bring the parties back to their respective positions prior to the illegal strike and lockout which shall be done by reinstating the remaining Ees. However, it is the general rule that strikers are not entitled to backwages. The principle of “no work, no pay” is applicable in view of the finding of the illegality of the strike. (Philippine Inter‐Fashion, Inc v. NLRC, G.R. No. L‐59847, Oct. 18, 1982)

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Q: What are the exceptions to the “no backwages rule” of strikers? A: 1. When the Ees were illegally locked thus compelling them to stage a strike 2. When the Er is guilty of the grossest form of ULP 3. When the Er committed discrimination in the rehiring of strikers refusing to readmit those against whom there were pending criminal cases while admitting nonstrikers who were also criminally charged in court; 4. When the workers who staged a voluntary ULP strike offered to return to work unconditionally but the Er refused to reinstate them. (Manila Diamond Hotel vs. Manila Diamond Hotel Ees’ Union, G.R. No. 158075, June 30, 2006) d.Assumption of Jurisdiction by the Secretary of Labor or Certification of the Labor dispute to the NLRC for compulsory arbitration Q: Discuss the assumption of jurisdiction by the Secretary of Labor and Employment (SLE) on strikes/lockouts. A: 1. Discretionary a. If in his opinion there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest. b. He may certify the same to the NLRC for compulsory arbitration c. Effect – Automatically enjoins the intended or impending strike/lockout but if one has already taken place, all striking or locked out Ees shall immediately return to work and the Er shall immediately resume operations and re‐admit all workers under the same terms and conditions prevailing before the strike or lockout (Trans‐ Asia Shipping Lines, Inc.‐Unlicensed Crews Ee’s Union v. CA, G.R. No. 145428, July 7, 2004) Note: A motion for reconsideration does not suspend the effects as the assumption order is immediately executory.

2.

Mandatory (within 24 hours) a. In labor disputes adversely affecting the continued operation of hospitals, clinics or medical institutions.


LABOR RELATIONS LAW b.

May assume jurisdiction or certify it to the NLRC for compulsory arbitration c. Duty of striking union or locking out Er to provide and maintain an effective skeletal workforce of medical and other health personnel, where movement and service shall be unhampered and unrestricted as are necessary to insure the proper and adequate protection of the life and health of its patients most especially emergency cases for the duration of the strike or lockout (Art. 263 [g]) Q: What does the phrase “under the same terms and conditions” contemplate? A: GR: It contemplates only actual reinstatement. This is in keeping with the rationale that any work stoppage or slowdown in that particular industry can be inimical to the national economy. XPN: Payroll reinstatement in lieu of actual reinstatement but there must be showing of special circumstances rendering actual reinstatement impracticable, or otherwise not conducive to attaining the purpose of the law in providing for assumption of jurisdiction by the SLE in a labor dispute that affects the national interest. (Manila Diamond Hotel Ees Union v. SLE, G.R. No. 140518, Dec. 16, 2004) Q: What are issues that the SLE may resolve when he assumes jurisdiction over a labor dispute? A: 1. Issues submitted to the SLE for resolution and such issues involved in the labor dispute itself. (St. Scholastica’s College v. Torres, G.R. No. 100158, June 2, 1992) 2. SLE may subsume pending labor cases before LAs which are involved in the dispute and decide even issues falling under the exclusive and original jurisdiction of LAs such as the declaration of legality or illegality of strike (Int’l. Pharmaceuticals v. SLE, G.R. Nos. 92981‐ 83, Jan. 9, 1992) Note: Power of SLE is plenary and discretionary. (St. Luke’s Medical Center v. Torres, G.R. No. 99395, June 29, 1993)

Q: Is it necessary for the SLE to issue a return‐to‐ work order in an assumption order?

A: No, the mere issuance of an assumption order automatically carries with it a return‐to‐work order although not expressly stated therein. (TSEU‐FFW v. CA, G.R. Nos. 143013‐14, Dec.18, 2000) Q: What is the extent of the powers of the President during strikes/lockouts? A: 1. May determine the industries, which are in his opinion indispensable to national interest 2. May intervene at any time and assume jurisdiction over any such labor dispute in order to settle or terminate the same. (Art. 263[g]) Note: The decision of the President/SLE is final and executory after receipt thereof by the parties.

Q: May a return to work order be validly issued pending determination of the legality of the strike? A: Yes. Where the return to work order is issued pending the determination of the legality of the strike, it is not correct to say that it may be enforced only if the strike is legal and may be disregarded if illegal. Precisely, the purpose of the return to work order is to maintain the status quo while the determination is being made. (Sarmiento v. Tuico, G.R. Nos. 75271‐73, June 27, 1988) e.Nature of Assumption Order or Certification Order Q: What is the nature of the power of SLE under Art. 263(g)? A: The assumption of jurisdiction is in the nature of a police power measure. This is done for the promotion of the common good considering that a prolonged strike or lockout can be inimical to the national economy. The SLE acts to maintain industrial peace. Thus, his certification for compulsory arbitration is not intended to impede the worker’s right to strike but to obtain a speedy settlement of the dispute. (Philtread Workers Union v. Confesor, G.R. No. 117169, Mar. 12, 1997) Art. 263(g) does not interfere with the workers right to strike but merely regulates it, when in the exercise of such right national interest will be affected. The LC vests upon the SLE the discretion to determine what industries are indispensable to national interest. Q: What is the nature of assumption and certification orders of the Secretary of Labor?

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UST GOLDEN NOTES 2011 A: The underlying principle embodied in Art. 264 (g) on the settlement of labor disputes is that assumption and certification orders are executor in character and are strictly complied with by the parties even during the pendency of any petition questioning their validity. This extraordinary authority given to the Secretary of Labor is aimed at arriving at a peaceful and speedy solution to labor disputes, without jeopardizing national interests. Q: A notice of strike was filed by the PSBA Ees Union‐FFW, alleging union busting, coercion of Ees and harassment on the part of PSBA. The conciliation being ineffective, the strike pushed through. A complaint for ULP and for a declaration of illegality of the strike with a prayer for preliminary injunction was filed by PSBA against the union. While the cases were pending, a complaint was filed in the RTC of Manila by some PSBA students against PSBA and the union, seeking to enjoin the union and its members from picketing and from barricading themselves in front of the schools main gate. A TRO was then issued by the RTC, which the union opposed on the ground that the case involves a labor dispute over which the RTC had no jurisdiction. The Acting SLE later on assumed jurisdiction over the labor dispute and ordered the striking Ee’s to return to work. Was the SLE correct in ordering the striking Ees to return to work? A: Yes. In the opinion of the Acting SLE, the labor dispute adversely affected the national interest, affecting as it did 9,000 students. He is authorized by law to assume jurisdiction over the labor dispute, after finding that it adversely affected the national interest. This power is expressly granted by Art. 263 (g) of the LC, as amended by B.P. Blg. 227. Q: Does the RTC have jurisdiction to decide on the case filed by the PSBA students? A: No, the RTC was without jurisdiction over the subject matter of the case filed by some PSBA students, involving as it does a labor dispute over which the labor agencies had exclusive jurisdiction. That the regular courts have no jurisdiction over labor disputes and to issue injunctions against strikes is well‐settled. (PSBA v. Noriel, G.R. No. 80648, Aug. 15, 1988) Q: Members of the union learned that a redundancy program would be implemented by the company. Thereupon it filed a Notice of strike on the grounds of ULP. A number of conciliation

168

meetings were conducted but to no avail so the union staged a strike while the company terminated 383 union members from service pursuant to its redundancy program. Pursuant to Art. 263(g) of the LC the SLE certified the labor dispute for compulsory arbitration. Accordingly the SLE enjoined the strike staged by the union and all striking workers were directed to return to work within 24 hours except for those who were terminated due to redundancy. Was the SLE correct in excepting from the return‐ to‐work order those who were terminated due to redundancy? A: No, Art. 263(g) is clear and unequivocal in stating that all striking or lock‐out Ees shall immediately return to work and the Er shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. Records of the case would show that the strike occurred one day before the members of the union were dismissed due to alleged redundancy. Thus the abovementioned article directs that the Er must readmit all workers under the same terms and conditions prevailing before the strike. (PLDT v. Manggagawa ng Komunikasyon sa Pilipinas, G.R. No. 162783, July 14, 2005) f.Effect of defiance of Assumption or Certification Order Q: What is the effect of defiance to the return to work order? A: It shall be considered an illegal act committed in the course of the strike or lockout and shall authorize the SLE or the NLRC, as the case may be, to enforce the same under pain or loss of employment status or entitlement to full employment benefits from the locking‐out Er or backwages, damages and/or other positive and/or affirmative reliefs, even to criminal prosecution against the liable parties. (Sec. 6, Rule IX, of the New Rules of Procedure of the NLRC; St. Scholastica’s College v. Torres, G.R. No. 100158, June 2, 1992) g.Illegal Strike Q: When is a strike illegal? A: 1. Contrary to specific prohibition of law, such as strike by employees (Ees) performing governmental functions; 2. Violates a specific req’t of law;


LABOR RELATIONS LAW 3.

4.

5. 6.

Declared for an unlawful purpose, such as inducing the employer (Er) to commit ULP against non‐union Ees; Employs unlawful means in the pursuit of its objective, such as widespread terrorism of non‐strikers; Declared in violation of an existing injunction; Contrary to an existing agreement, such as a no strike clause or conclusive arbitration clause

Q: What is “good faith (GF) strike” doctrine? A: A strike may be considered legal where the union believed that the company committed ULP and the circumstances warranted such belief in GF, although subsequently such allegations of ULP are found out as not true. (Bacus v. Ople, GR No. L‐ 56856, Oct. 23, 1984, People’s Industrial and Commercial Ees and Organization (FFW) v. People’s Industrial and Commercial Corp., G.R. No.37687, Mar. 15, 1982) Q: What is the effect of the GF of strikers on the legality of strike? A: GR: A strike grounded on ULP is illegal if no such acts actually exist. XPN: Even if no ULP acts are committed by the Er, if the Ees believe in GF that ULP acts exist so as to constitute a valid ground to strike, then the strike held pursuant to such belief may be legal. Where the union believed that the Er committed ULP and the circumstances warranted such belief in GF, the resulting strike may be considered legal although, subsequently, such allegations of ULP were found to be groundless. (NUWHRAIN‐Interim Junta v. NLRC, G.R. No. 125561, Mar. 6, 1998) (1)Liability of Officers of the Union and Ordinary Workers Q: Should separation pay and backwages be awarded to the participants of an illegal strike? A: No backwages will be awarded to union members as a penalty for their participation in the illegal strike. As for the union officers, for knowingly participating in an illegal strike, the law mandates that a union officer may be terminated from employment and they are not entitled to any relief. (Gold City Integrated Port Services, Inc. v. NLRC, G.R. No. 86000, Sep. 21, 1990 )

Q: What is the rule on reinstatement of striking workers? A: Striking employees are entitled to reinstatement, regardless of whether or not the strike was the consequence of the employers ULP because while out on strike, the strikers are not considered to have abandoned their employment, but rather have only ceased from their labor; the declaration of a strike is not a renunciation of employment relation. Q: Who are not entitled to reinstatement? A: 1. Union officers who knowingly participate in the illegal strike 2. Any striker or union who knowingly participates in the commission of illegal acts during the strike Note: Those union members who have joined an illegal strike but have not committed any illegal act shall be reinstated but without back wages. The responsibility for the illegal acts committed during the strike must be on an individual and not on a collective basis. (First City Interlink Transportation Co., Inc. v. Confesor, G.R. No. 106316, May 5, 1997)

Q: Are strikers entitled to their backwages or strike duration pay? A: GR: No, even if such strike was legal. XPN: 1. Where the strikers voluntarily and unconditionally offered to return to work, but the employer refused to accept the offer – workers are entitled to back wages from the date their offer was made 2. When there is a return‐to‐work order and the Ees are discriminated against other Ees, workers are entitled to back wages from the date of discrimination 3. In case of a ULP strike, in the discretion of the authority deciding the case Q: What is the rule in strikes in hospitals? A: 1. It shall be the duty of the striking employees or locking‐out employer to provide and maintain an effective skeletal workforce of medical and health personnel for the duration of the strike or lockout. 2. SLE may immediately assume jurisdiction within 24 hours from knowledge of the

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UST GOLDEN NOTES 2011 occurrence of such strike or lockout certify it to the NLRC for compulsory arbitration. Q: More or less 1400 Ees of the company staged a mass walk‐out, allegedly without anybody leading them as it was a simultaneous, immediate and unanimous group action and decision, to protest the non‐payment of their salaries and wages. The Minister of Labor and Employment who found the strike to be illegal granted the clearance to terminate the employment of those who were instigators in the illegal strike. Was the decision of the Minister of Employment in granting the clearance correct? A: No, a mere finding of the illegality of a strike should not be automatically followed by wholesale dismissal of the strikers from their employment. While it is true that administrative agencies exercising quasi‐judicial functions are free from the rigidities of procedure, it is equally well‐settled that avoidance of technicalities of law or procedure in ascertaining objectively the facts in each case should not, however, cause denial of due process. (Bacus v. Ople, G.R. No. L‐56856, Oct. 23, 1984) Q: 2 days after the union struck, the SLE ordered the striking workers to return to work within 24 hours. But the striking union failed to return to work and instead they continued their pickets. As a result, violence erupted in the picket lines. The service bus ferrying non‐striking workers was stoned causing injuries to its passengers. Threats, defamation, illegal detention, and physical injuries also occurred. The company was directed to accept back all striking workers, except the union officers, shop stewards, and those with pending criminal charges. Was the SLE correct in not including the union officers, shop stewards and those with pending criminal charges in the return‐ to‐work order? A: No, to exclude union officers, shop stewards and those with pending criminal charges in the directive to the company to accept back the striking workers without first determining whether they knowingly committed illegal acts would be tantamount to dismissal without due process of law. (Telefunken Semiconductors Ees Union‐FFW v. SLE, G.R. No. 122743 & 127215, Dec. 12, 1997) (2)Waiver of Illegality of Strike Q: When is there a waiver of the illegality of a strike by the employer?

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A: When an employer accedes to the peaceful settlement brokered by the NLRC by agreeing to accept all employees who had not yet returned to work, it waives the issue of the illegality of the strike. (Reformist Union v. NLRC, G.R. No. 120482,Jan. 27, 1997) j.Injunctions Q: What is an injunction? A: It is an order or a writ that commands a person to do or not to do a particular act. It may be a positive (mandatory) or a negative (prohibitory) command. (1)Requisites for Labor Injunctions Q: May the court or quasi‐judicial entity issue any injunction during strikes/lockouts? A: GR: No court or entity shall enjoin any picketing, strike or lockout, or any labor dispute. XPN: 1. When prohibited or unlawful acts are being or about to be committed that will cause grave or irreparable damage to the complaining party. (Art. 218[e]) 2. On the ground of national interest 3. The SLE or the NLRC may seek the assistance of law enforcement agencies to ensure compliance with this provision as well as with such orders as he may issue to enforce the same (Art. 263[g]) (2)Innocent Bystander Rule Q: What must an “innocent by‐stander” satisfy before a court may enjoin a labor strike? A: The innocent by stander must show: 1. Compliance with the grounds specified in Rule 58 of the Rules of Court, and 2. That it is entirely different from, without any connection whatsoever to, either party to the dispute and, therefore, its interests are totally foreign to the context thereof. (MSF Tire & Rubber v. CA, G.R. 128632, Aug. 5, 1999) Q: May the RTC take cognizance of the complaint where the same is but an incident of a labor dispute? rd A: No, where the subject matter of the 3 party claim is but an incident of the labor case, it is a matter beyond the jurisdiction of the RTC, such


LABOR RELATIONS LAW courts have no jurisdiction to act on labor cases or various incidents arising therefrom, including the execution of decisions, awards or orders. A party, by filing its 3rd party claim with the deputy sheriff, it submitted itself to the jurisdiction of the NLRC acting through the LA. The broad powers granted to the LA and to the NLRC by Art. 217, 218 and 224 of the LC can only be interpreted as vesting in them jurisdiction over incidents arising from, in connection with or relating to labor disputes, as the controversy under consideration, to the exclusion of the regular courts. The RTC, being a co‐equal body of the NLRC, has no jurisdiction to issue any restraining order or injunction to enjoin the execution of any decision of the latter. (Deltaventures v. Cabato, G.R. No. 118216, Mar. 9, 2000) Q: The employer filed with the RTC a complaint for damages with preliminary mandatory injunction against the union, the main purpose of which is to dispense the picketing of the members of the union. The union filed a motion to dismiss on the ground of lack of jurisdiction. The RTC denied the motion to dismiss and enjoined the picketing, it said that mere allegations of Er‐Ee relationship does not automatically deprive the court of its jurisdiction and even the subsequent filing of charges of ULP, as an afterthought, does not deprive it of its jurisdiction. Was the issuance by the RTC of the injunction proper? A: No, the concerted action taken by the members of the union in picketing the premises of the department store, no matter how illegal, cannot be regarded as acts not arising from a labor dispute over which the RTCs may exercise jurisdiction. (Samahang Manggagawa ng Liberty Commercial v. Pimentel, G.R. No. L‐78621, Dec. 2, 1987)

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UST GOLDEN NOTES 2011 H. PROCEDURE AND JURISDICTION 1.LABOR ARBITER a.Jurisdiction Q: What is the distinction between the jurisdiction of the labor arbiter (LA) and the National Labor Relations Commission (NLRC)? A: 1. The NLRC has exclusive appellate jurisdiction on all cases decided by the LA. 2. The NLRC does not have original jurisdiction on the cases over which the LA have original and exclusive jurisdiction. 3. The NLRC cannot have appellate jurisdiction if a claim does not fall within the exclusive original jurisdiction of the LA. Q: What is the nature of jurisdiction of labor arbiters (LAs)? A: It is original and exclusive. LAs have no appellate jurisdiction. Q: What are the cases falling under the jurisdiction of labor arbiters (LAs)? A: Exclusive and original jurisdiction to hear and decide the following cases involving all workers: 1. 2. 3.

4.

5.

6.

7.

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ULP cases Termination disputes If accompanied with a claim for reinstatement, those that workers file involving wages, rates of pay, hours of work and other terms and conditions of employment Claims for actual, moral, exemplary and other forms of damages arising from Er‐ Ee relations Cases arising from any violation of Art. 264, including questions involving the legality of strikes and lockouts; Except claims for Employment Compensation, Social Security, Philhealth and maternity benefits, all other claims arising from Er‐Ee relations, including those of persons in domestic or household service, involving an amount exceeding P5000 regardless of whether accompanied with a claim for reinstatement Monetary claims of overseas contract workers arising from Er‐Ee relations under the Migrant Worker’s Act of 1995 as amended by RA 10022

8.

Wage distortion disputes in unorganized establishments not voluntarily settled by the parties pursuant to RA 6727 9. Enforcement of compromise agreements when there is non‐compliance by any of the parties pursuant to Art. 227 of the Labor Code (LC), as amended; and 10. Other cases as may be provided by law

Note: Although the provision speaks of exclusive and original jurisdiction of LAs, the cases enumerated may instead be submitted to a voluntary arbitrator by agreement of the parties under Art. 262 of the LC. The law prefers voluntary over compulsory arbitration.

Q: What is the nature of the cases which the labor arbiter (LA) may resolve? A: The cases that an LA can hear and decide are employment related. Where no Er‐Ee relationship exists between the parties and no issue is involved which may be resolved by reference to the LC, other labor statutes, or any collective bargaining agreement, it is the RTC that has jurisdiction. (Lapanday Agricultural Dev’t. Corp v. CA, G.R. No. 112139, Jan.31, 2000) The LA has jurisdiction over controversies involving Ers and Ees only if there is a “reasonable causal connection” between the claim asserted and the Er‐ Ee relations. Absent such link, the complaint is cognizable by the regular court. (Eviota v. CA, G.R. No. 152121, July 29, 2003) Q: Do labor arbiters exercise concurrent jurisdiction with the NLRC? A: Yes, with respect to contempt cases. Q: What are the cases referred to grievance machinery and voluntary arbitration? A: Disputes arising from the: 1. Interpretation or implementation of the CBA 2. Interpretation or enforcement of company personnel policies Q: What is the extent of the jurisdiction of the labor arbiter (LA) if there are unresolved matters arising from the interpretation of the CBA? A: GR: LAs have no jurisdiction over unresolved or unsettled grievances arising from the interpretation or implementation of the CBA and those arising from the interpretation or enforcement of company personnel policies.


PROCEDURE AND JURISDICTION XPN: Actual termination disputes Note: Where the dispute is just in the interpretation, implementation or enforcement stage of the termination, it may be referred to the grievance machinery set up by the CBA or by voluntary arbitration. Where there was already actual termination, i.e., violation of rights, it is already cognizable by the LA. (Maneja v. NLRC, G.R. No. 124013, June 5, 1998)

Q: Does the use of the word “may” in the provisions of the Grievance Procedure allow the alternative of submitting the case before the labor arbiter (LA)? A: Yes. The use of the word “may” shows the intention of the parties to reserve the right to submit the illegal termination dispute to the jurisdiction of the LA, rather than to a voluntary arbitrator. Petitioner validly exercised his option to submit his case to a LA when he filed his complaint before the proper government agency. In other words, the CA is correct in holding that voluntary abitration is mandatory in character if there is a specific agreement between the parties to that effect. It must be stressed however that, in the case at bar, the use of the word “may” shows the intention of the parties to reserve the right of recourse to LAs. (Vivero v. CA, G.R. No. 138938, Oct.24, 2000) Q: What are the cases which do not fall under the jurisdiction of the labor arbiters (LA)? A: LAs have no jurisdiction over the ff: 1. 2. 3.

4.

5.

6.

Foreign governments (JUSMAG‐Phils. v. NLRC, G.R. No. 108813, Dec. 15, 1994) Int’l agencies (Lasco v. NLRC, G.R. Nos. 109095‐109107, Feb. 23, 1995) Intra‐corporate disputes which fall under P.D. 902‐A and now falls under the jurisdiction of the regular courts pursuant to the new Securities Regulation Code (Nacpil v. IBC, G.R. No. 144767, Mar. 21, 2002) Executing money claims against government (Dept of Agriculture v. NLRC, G.R. No. 104269, Nov. 11, 1993) Cases involving GOCCs with original charters which are governed by civil service law, rules or regulations (Art. IX‐B, Sec.2, No.1, 1987 Constitution) Local water district (Tanjay Water District v. Gabaton, April 17, 1989) except where NLRC jurisdiction is invoked (Zamboanga

City Water District v. Buat, G.R. No. 104389, May 27, 1994) 7. The aggregate money claim does not exceed P5000 and without claim for reinstatement (Rajah Humabon Hotel, Inc. v. Trajano, G.R. Nos. 100222‐23, Sep.14, 1993) 8. Claim of employee (Ee) for cash prize under the Innovation Program of the company, although arising from Er‐Ee relationship, is one requiring application of general civil law on contracts which is within the jurisdiction of the regular courts (SMC v. NLRC, G.R. No. 80774, May 31, 1988) 9. Cause of action based on quasi‐delict or tort which has no reasonable connection with any of the claims enumerated in Art.217 of the LC (Ocheda v. CA, G.R. No. 85517, Oct. 16, 1992) 10. Complaint arising from violation of training agreement (Singapore Airlines v. Pano, G.R. No. L‐47739, June 22, 1983) Q: FASAP, the sole and exclusive bargaining representative of the flight attendants, flight stewards and pursers of PAL, and respondent PAL entered into a CBA incorporating the terms and conditions of their agreement for the years ‘01‐ ‘05. Sec. 144, Part A of the CBA provides that compulsory retirement shall be 55 for females and 60 for males. They filed an action with the RTC claiming that the CBA provision is discriminatory and hence unconstitutional. The RTC issued a TRO. The appellate court ruled that the RTC has no jurisdiction over the case at bar. Whether RTC has jurisdiction over the petitioners' action challenging the legality of the provisions on the compulsory retirement age contained in the CBA? A: Yes. The subject of litigation is incapable of pecuniary estimation, exclusively cognizable by the RTC, pursuant to Sec. 19 (1) of BP Blg. 129, as amended. Being an ordinary civil action, the same is beyond the jurisdiction of labor tribunals. Not every controversy or money claim by an employee (Ee) against the employer (Er) or vice‐ versa is within the exclusive jurisdiction of the LA. Actions between Ees and Er where the Er‐Ee relationship is merely incidental and the cause of action precedes from a different source of obligation is within the exclusive jurisdiction of the regular court. Here, the Er‐Ee relationship between the parties is merely incidental and the cause of action ultimately arose from different sources of obligation, i.e., the Constitution and CEDAW. (Halaguena vs. PAL Incorporated, G.R. No. 172013, Oct. 2, 2009)

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UST GOLDEN NOTES 2011 Q: Who has the exclusive appellate jurisdiction over all cases decided by Labor Arbiters? A: The NLRC. Q: What is the effect of perfection of an appeal on execution? A: The perfection of an appeal shall stay the execution of the decision of the Labor Arbiter on appeal, except execution for reinstatement pending appeal.

A: 1.

Note: The provision of Art. 223 is clear that an award by the LA for reinstatement shall be immediately executor even pending appeal and the posting of a bond by the employer shall not stay the execution for reinstatement. (Pioneer Texturizing Corp. v. NLRC, G.R. No. 118651, Oct. 16, 1997)

b.Effect of self‐executing order of reinstatement on backwages Q: May dismissed employees (Ees) collect their wages during the period between the Labor Arbiter’s (LA’s) order of reinstatement pending appeal and the NLRC decision overturning that of the LA? A: Yes. Par. 3 of Art. 223 of the Labor Code provides that the decision of the LA reinstating a dismissed or separated Ee, insofar as the reinstatement aspect is concerned, shall immediately be excutory, pending appeal. Even if the order of reinstatement of the LA is reversed on appeal, it is obligatory on the part of the employer (Er) to reinstate and pay the wages of the dismissed Ee during the period of appeal until reversal by the higher court. On the other hand, if the Ee has been reinstated during the appeal period and such reinstatement order is reversed with finality, the Ee is not required to reimburse whatever salary he received for he is entitled to such, more so if he actually rendered services during the period. (Pfizer v. Velasco, G.R. No. 177467, March 9, 2011) Unless there is a restraining order, it is ministerial upon the LA to implement the order of reinstatement and it is mandatory on the Er to comply therewith. (Garcia v. PAL, G.R. No. 164856, Jan. 20, 2009) c.Requirements to perfect appeal to NLRC Q: How is an appeal from LA to NLRC perfected?

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2.

The appeal is perfected: a. Filed within the reglementary period provided in Sec. 1 of this Rules b. Verified by the appellant himself in accordance with Sec. 4, Rule 7 of the Rules of Court, as amended c. In the form of a memorandum of appeal which shall state the grounds relied upon and the arguments in support thereof, the relief prayed for, and with a statement of the date the appellant received the appealed decision, resolution or order d. In 3 legibly typewritten or printed copies e. Accompanied by (i) proof of payment of the required appeal fee; (ii) posting of a cash or surety bond as provided in Sec. 6 of this Rule; (iii) a certificate of non‐forum shopping; and (iv) proof of service upon the other parties. Mere notice of appeal without complying with the other requisites aforestated shall not stop the running of the period for perfecting an appeal.

Q: Is the posting of an appeal bond required for the perfection of an appeal from a Labor Arbiter’s (LA’s) decision involving monetary award? A: Yes. In case the decision of the LA or the Regional Director involves a monetary award, an appeal by the employer may be perfected only upon the posting of a bond. (Sec.6, Rule VI, NLRC 2005 Rules of Procedure) Q: What are the forms of the appeal bond? A: It shall either be in the form of cash deposit or surety bond equivalent in amount to the monetary award, exclusive of damages and attorney's fees. (Sec. 6, Rule VI, NLRC 2005 Rules of Procedure) Q: Who may issue a surety bond? A: It shall be issued by a reputable bonding company duly accredited by the Commission or the SC, and shall be accompanied by original or certified true copies of: 1. A joint declaration under oath by the Er, his counsel, and the bonding company, attesting that the bond posted is genuine, and shall be in effect until final disposition of the case.


PROCEDURE AND JURISDICTION 2. 3.

4. 5. 6. 7. 8.

An indemnity agreement between the Er‐ appellant and bonding company; Proof of security deposit or collateral securing the bond: provided, that a check shall not be considered as an acceptable security; A certificate of authority from the Insurance Commission; Certificate of registration from the SEC; Certificate of authority to transact surety business from the Office of the President; Certificate of accreditation and authority from the SC; and A notarized board resolution or secretary's certificate from the bonding company showing its authorized signatories and their specimen signatures. (Sec. 6, Rule VI, NLRC 2005 Rules of Procedure)

Note: The appellant shall furnish the appellee with a certified true copy of the said surety bond with all the above‐mentioned supporting documents.

Q: What is the period within which a cash or surety bond shall be valid and effective? A: From the date of deposit or posting, until the case is finally decided, resolved or terminated, or the award satisfied. This condition shall be deemed incorporated in the terms and conditions of the surety bond, and shall be binding on the appellants and the bonding company. (Sec. 6, Rule VI, NLRC 2005 Rules of Procedure) Q: What is the effect if the bond is verified by the NLRC to be irregular or not genuine? A: The Commission shall cause the immediate dismissal of the appeal, and censure or cite in contempt the responsible parties and their counsels, or subject them to reasonable fine or penalty. (Sec.6, Rule VI, NLRC 2005 Rules of Procedure) Note: The appellee shall verify the regularity and genuineness of the bond and immediately report any irregularity to the NLRC.

Q: May the bond be reduced? A: GR: No. XPN: On meritorious grounds, and only upon the posting of a bond in a reasonable amount in relation to the monetary award.

Note: The mere filing of a motion to reduce bond without complying with the requisites in the preceding paragraphs shall not stop the running of the period to perfect an appeal (Sec. 6, Rule VI, NLRC 2005 Rules of Procedure).

Q: Company "A", within the reglementary period, appealed the decision of a Labor Arbiter directing the reinstatement of an Ee and awarding backwages. However, A's cash bond was filed beyond the ten day period. Should the NLRC entertain the appeal? Why? A: No, the NLRC should not entertain the appeal, as the same was not perfected for failure to file a bond. In ABA vs. NLRC, G.R. No.122627, July 18, 1999, the SC ruled: "An appeal bond is necessary...the appeal may be perfected only upon the posting of cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed from." (2001 Bar Question) Q: Is a motion for reconsideration (MR) of the NLRC decision required before certiorari may be availed of? A: Yes. A MR is required to enable NLRC to correct its mistakes. If no MR is filed, NLRC’s decision becomes final and executory. Q: What is the remedy in case of denial of the MR? A: If the motion is denied, the aggrieved party may file a petition for certiorari not later than 60 days from notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely filed, whether such motion is required or not, the 60 day period shall be counted from notice of the denial of said motion. No extension of time to file the petition shall be granted except for compelling reason and in no case exceeding 15 days. (Sec. 4, Rule 65, Rules of Court.) Q: What is the effect if no service of summons was made? A: In the absence of service of summons or a valid waiver thereof, the hearings and judgment rendered by the labor arbiter is null and void. Q: What is compulsory arbitration? A: The process of settlement of labor disputes by a government agency which has the authority to investigate and make an award binding on all the parties.

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UST GOLDEN NOTES 2011 Q: Can the Labor Arbiter (LA) conduct compulsory arbitration? A: Yes. Under the Labor Code, it is the LA who is clothed with the authority to conduct compulsory arbitration on cases involving termination disputes [Art.217, P.D. 442, as amended]. (PAL v. NLRC, G.R. No. 55159, Dec. 22, 1989) Q: What are the rules on venue of filing cases? A: 1. All cases which the Labor Arbiters (LAs) have authority to decide may be filed in the Regional Arbitration Branch (RAB) having jurisdiction over the workplace of the complainant /petitioner. Note: Workplace is understood to be the place or locality where the employee (Ee) is regularly assigned when the cause of action arose. It shall include the place where the Ee is supposed to report back after a temporary detail, assignment or travel. In case of field Ees, as well as ambulant or itinerant workers, their workplace is where they are” a. Regularly assigned b. Supposed to regularly receive their salaries and wages c. Receive their work instructions from d. Reporting the results of their assignment to their employers (Er)

2.

3.

4.

5.

Where 2 or more RABs have jurisdiction over the workplace, the first to acquire jurisdiction shall exclude others. Improper venue when not objected to before filing of position papers shall be deemed waived. Venue may be changed by written agreement of the parties or when the NLRC or the LA so orders, upon motion by the proper party in meritorious cases. For Overseas Contract Workers where the complainant resides or where the principal office of the respondent Er is located, at the option of the complainant.

Note: The Rules of Procedure on Venue is merely permissive, allowing a different venue when the interest of substantial justice demands a different one. (Dayag v. Canizares, GR. No. 124193, Mar. 6, 1998)

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2.NATIONAL LABOR RELATIONS COMMISSION (NLRC) Q: What is the NLRC? A: It is an administrative body with quasi‐judicial functions and the principal government agency that hears and decides labor‐management disputes; it is attached to the DOLE solely for program and policy coordination only. Q: How are the powers and functions of the NLRC allocated? A: 1. En Banc a. Promulgating rules and regulations and governing the hearings and disposition of cases before any of its divisions and regional branches. b. Formulating policies affecting its administration and operations. c. On temporary or emergency basis, to allow cases within the jurisdiction of any division to be heard and decided by any other division whose docket allows the additional workload and such transfer will not expose litigants to unnecessary additional expense. 2. Division (8 Divisions with 3 members) a. Adjudicatory; b. All other powers, functions and duties; c. Exclusive appellate jurisdiction over cases within their respective territorial jurisdiction. Q: Does an individual Commissioner have adjudicatory power? A: No. The law lodges the adjudicatory power on each of the eight divisions, not on the individual commissioners nor on the whole commission. The “division” is a legal entity, not the person who sits in it. Hence, an individual commissioner has no adjudicatory power, although of course, he can concur or dissent in deciding a case. a.Jurisdictions Q: What are the two kinds of jurisdiction of the NLRC? A: 1. Exclusive Original Jurisdiction a. Certified labor disputes causing or likely to cause a strike or lockout in an industry indispensable to national


PROCEDURE AND JURISDICTION

2.

interest, certified to it by the Secretary of Labor or the President for compulsory arbitration b. Injunction in ordinary labor disputes to enjoin or restrain any actual or threatened commission of any or all prohibited or unlawful acts or to require the performance of a particular act in any labor dispute which, if not restrained or performed forthwith, may cause grave or irreparable damage to any party c. Injunction in strikes or lockouts under Art. 264 of the Labor Code (LC) d. Contempt cases Exclusive Appellate Jurisdiction a. All cases decided by the Labor Arbiters under Art. 217(b) of the LC and Sec. 10 of R.A.8042 (Migrant Worker’s Act); and b. Cases decided by the Regional Offices of DOLE in the exercise of its adjudicatory function under Art.129 of the LC over monetary claims of workers amounting to not more than P5000 and not accompanied by claim for reinstatement.

Q: What is the composition of the NLRC? A: 1. Chairman 2. 23 Members a. 8 members each, shall be chosen only from among the nominees of the workers and employers (Er) organization respectively. b. The Chairman and the 7 remaining members shall come from the public sector, with the latter to be chosen preferably from among the incumbent Labor Arbiters. c. Upon assumption into office, the members nominated by the workers and Ers organization shall divest themselves of any affiliation with or interest in the federation or association to which they belong. Note: There is no need for the Commission on Appointments to confirm the positions in the NLRC. Such requirement has no constitutional basis. (Calderon v. Carale, GR. No. 91636, April 23, 1992)

Q: How does the NLRC adjudicate cases? A: 1. The NLRC adjudicates cases by division. A concurrence of 2 votes is needed for a

valid judgment. Note: Whenever the required membership in a division is not complete and the concurrence of the Commissioners to arrive at judgment or resolution cannot be obtained, the Chairman shall designate such number of additional Commissioners from the other divisions as may be necessary.

2.

It shall be mandatory for the division to meet for purposes of consultation. Note: The conclusion of a division on any case submitted to it for decision should be reached in consultation before the case is assigned to a member for the writing of the opinion.

3.

A certification that a consultation has been conducted, signed by the presiding commissioner of the division, shall be issued (copy attached to the record of case and served upon the parties). Q: What are the qualifications of the Chairman and the Commissioners? A: 1. Member of the Philippine Bar 2. Engaged in the practice of law in the Philippines for at least 15 years 3. At least 5 years experience or exposure in handling labor management relations 4. Preferably a resident of the region where he is to hold office Q: What are the qualifications of an Executive Labor Arbiter? A: 1. Member of the Philippine Bar 2. Engaged in the practice of law in the Philippines for at least 10 years 3. At least 5 years experience or exposure in handling labor management relations Q: What is the term of office of the Chairman, Commissioners and Labor Arbiters (LAs)? A: They shall hold office during good behavior until they reach the age of 65 unless removed for causes as provided by law or become incapacitated to discharge the function of his office. Provided, however, that the President of the Philippines may extend the services of the Commissioners and LAs up to the maximum age of 70 years upon the recommendation of the

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UST GOLDEN NOTES 2011 Commission en banc. Q: Some disgruntled members of Bantay Labor Union filed with the Regional Office of the DOLE a written complaint against their union officers for mismanagement of union funds. The Regional Director (RD) did not rule in the complainants' favor. Not satisfied, the complainants elevated the RD’s decision to the NLRC. The union officers moved to dismiss on the ground of lack of jurisdiction. Are the union officers correct? Why? A: Yes, the union officers are correct in claiming that the NLRC has no jurisdiction over the appealed ruling of the RD. in Barles v. Bitonio, G.R. No. 120220, June 16, 1999, the SC ruled: “Appellate authority over decisions of the RD involving examination of union accounts is expressly conferred on the Bureau of Labor Relations (BLR) under the Rule of Procedure on Mediation‐ Arbitration.” Sec. 4. Jurisdiction of the BLR — (b) The BLR shall exercise appellate jurisdiction over all cases originating from the RD involving complaints for examination of union books of accounts. The language of the law is categorical. Any additional explanation on the matter is superfluous." (2001 Bar Question) Q: Company "A" and Union "B" could not resolve their negotiations for a new CBA. After conciliation proceedings b e f o r e t h e NCMB proved futile, B went on strike. Violence during the strike prompted A to file charges against striker‐members of B for their illegal acts. The SLE assumed jurisdiction, referred the strike to the NLRC and issued a return‐to‐work order. The NLRC directed the parties to submit their respective position papers and documentary evidence. At the initial hearing before the NLRC, the parties agreed to submit the case for resolution after the submission of the position papers and evidence. Subsequently, the NLRC issued an arbitral award resolving the disputed provisions of the CBA and ordered the dismissal of certain strikers for having knowingly committed illegal acts during the strike. The dismissed employees elevated their dismissal to the CA claiming that they were deprived of their right to due process and that the affidavits submitted by A were self‐ serving and of no probative value. Should the appeal prosper? State the reason(s) for your answer clearly.

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A: The appeal should not prosper. The SC, in many cases, has ruled that decisions made by the NLRC may be based on position papers. In the question, it is stated that the parties agreed to submit the case for resolution after the submission of position papers and evidence. Given this fact, the striker‐ members of B cannot now complain that they were denied due process. They are in estoppel. After voluntarily submitting a case and encountering an adverse decision on the merits, it is too late for the loser to question the jurisdiction or power of the court. A party cannot adopt a posture of double dealing. (Marquez vs. Secretary of Labor, G.R. No. 80685, March 16, 1989). (2001 Bar Question) Q: Is barangay conciliation available in labor cases? A: No. Labor cases are not subject to barangay Conciliation since ordinary rules of procedure are merely suppletory in character vis‐à‐vis labor disputes which are primarily governed by labor laws. (Montoya v. Escayo, G.R. No. 82211‐12, Mar. 21, 1989) Q: What are the powers of the NLRC? A: 1. Rule making power – promulgation of rules and regulations: a. Governing disposition of cases before any of its division/regional offices. b. Pertaining to its internal functions c. As may be necessary to carry out the purposes of the Labor Code. 2. Power to issue compulsory processes (administer oaths, summon parties, issue subpoenas) 3. Power to investigate matters and hear disputes within its jurisdiction (adjudicatory power – original and appellate jurisdiction over cases) 4. Contempt power 5. Ocular Inspection 6. Power to issue injunctions and restraining orders b.Effect of NLRC reversal of Labor Arbiter’s order of reinstatement Q: May dismissed employees (Ees) collect their wages during the period between the Labor Arbiter’s (LA’s) order of reinstatement pending appeal and the NLRC decision overturning that of the LA?


PROCEDURE AND JURISDICTION A: Yes. Par. 3 of Art. 223 of the Labor Code provides that the decision of the LA reinstating a dismissed or separated Ee, insofar as the reinstatement aspect is concerned, shall immediately be excutory, pending appeal. Even if the order of reinstatement of the LA is reversed on appeal, it is obligatory on the part of the employer (Er) to reinstate and pay the wages of the dismissed Ee during the period of appeal until reversal by the higher court. On the other hand, if the Ee has been reinstated during the appeal period and such reinstatement order is reversed with finality, the Ee is not required to reimburse whatever salary he received for he is entitled to such, more so if he actually rendered services during the period. (Pfizer v. Velasco, G.R. No. 177467, March 9, 2011) c.Requirements to perfect appeal to Court of Appeals Q: Is judicial review of the NLRC’s decision available? A: Yes, through petitions for certiorari (Rule 65) which should be initially filed with the CA in strict observance of the doctrine on the hierarchy of courts as the appropriate forum for the relief desired. The CA is procedurally equipped to resolve unclear or ambiguous factual finding, aside from the increased number of its component divisions. (St. Martin Funeral Home v. NLRC, G.R. No. 130866, Sep. 16, 1998) Q: Within what period should the petition for certiorari be filed with the Court of Appeals? A: Under Section 4, Rule 65 (as amended by A.M. No. 00‐2‐03‐SC) of the Rules of Civil Procedure, the petition must be filed within sixty (60) days from notice of the judgment or from notice of the resolution denying the petitioner’s motion for reconsideration. This amendment is effective September 1, 2000, but being curative may be given retroactive application. (Narzoles v. NLRC, G.R. No. 141959, Sep. 29, 2000) The period within which a petition for certiorari against a decision of the NLRC may be filed should be computed from the date counsel of record of the party receives a copy of the decision or resolution, and not from the date the party himself receives a copy thereof. Article 224 of the Labor Code, which requires that copies of final decisions, orders or awards be furnished not only the party’s counsel of record but also the party himself applies to the execution thereof and not to the filing of an

appeal or petition for certiorari. (Ginete v. Sunrise Manning Agency, G.R. No. 142023, June 21, 2001) Q: What is an injunction or a temporary restraining order (TRO)? A: Orders which may require, forbid, or stop the doing of an act. The power of the NLRC to enjoin or restrain the commission of any or all prohibited or unlawful acts under Art. 218 of Labor Code can only be exercised in a labor disputes. Note: A restraining order is generally regarded as an order to maintain the subject of controversy in status quo until the hearing of an application for a temporary injunction. (BF Homes v. Reyes, G.R. No. L‐30690 November 19, 1982)

Q: Who may issue a TRO? A: 1. President (Art.263[g]) 2. Secretary of Labor (Art. 263[g]) 3. NLRC (Art.218) Note: Art. 218 of the Labor Code limits the grant of injunctive power to the “NLRC”. The LA is excluded statutorily. Hence, no NLRC Rules can grant him that power.

Q: What is the procedure for the issuance of restraining order/injunction? A: 1. Filing of a verified petition 2. Hearing after due and personal notice has been served in such manner as the Commission shall direct to: a. All known persons against whom relief is sought b. Also the Chief Executive or other public officials of the province or city within which the unlawful acts have been threatened or commercial charged with the duty to protect the complainant’s property. 3. Reception at the hearing of the testimonies of the witnesses with opportunity for cross‐examination, in support of the allegations of the complaint made under oath as well as testimony in opposition thereto. 4. Finding of fact of the Commission to the effect that: a. Prohibited or unlawful acts have been threatened and will be committed, or have been and will be continued unless restrained, but no

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b.

injunction or TRO shall be issued on account of any threat, prohibited or unlawful act, except against the persons, association or organization making the threat or committing the prohibited or unlawful act or actually authorizing or ratifying the same after actual knowledge thereof. The substantial and irreparable injury to the complainant’s property. Note: Irreparable Injury ‐an injury which cannot be adequately compensated in damages due to the nature of the injury itself or the nature of the right or property injured or when there exist no pecuniary standard for the measurement of damages.

c.

d.

That as to each item of relief to be granted, greater injury will be inflicted upon the complainant by the denial of the relief than will be inflicted upon the defendants by the granting of the relief. That complainant has no adequate remedy at law Note: Adequate remedy – one that affords relief with reference to the matter in controversy and which is appropriate to the particular circumstances of the case if the remedy is specifically provided by law. (PAL v. NLRC, GR. No. 120567, Mar. 20, 1998)

e.

5.

That public officers charged with the duty to protect complainant’s property are unable or unwilling to furnish adequate protection. Posting of a bond.

3.BUREAU OF LABOR RELATIONS (BLR)‐MED ARBITERS a.Jurisdiction Q: What is covered by the BLR’s jurisdiction and functions? A: The BLR no longer handles “all labor management disputes”; rather its functions and jurisdiction are largely confined to: 1. Union matters 2. Collective bargaining registry and 3. Labor education. Note: Jurisdiction over labor management problems or disputes is also exercised by other offices: 1. DOLE Regional Offices 2. Office of the Secretary of Labor 3. NLRC

180

4. 5. 6. 7. 8. 9.

POEA OWWA SSS‐ECC RTWPB NWPC Regular courts disputes.

over

intra‐corporate

Q: Who is a mediator‐arbiter? A: An officer in the Regional Office or Bureau authorized to hear, conciliate and decide representation cases or assist in the disposition of intra or inter‐union disputes. Q: What kinds of cases fall within BLR’s jurisdiction? A: The BLR has original and exclusive jurisdiction over: 1. Inter‐union disputes 2. Intra‐union disputes 3. Other related labor relations disputes Q: What is the coverage of inter/intra‐union disputes? A: They shall include: 1. Conduct or nullification of election of union and workers’ association officers 2. Audit/accounts examination of union or workers’ association funds 3. Deregistration of collective bargaining agreements (CBAs) 4. Validity/invalidity of union affiliation or disaffiliation 5. Validity/invalidity of acceptance/ non‐ acceptance for union membership 6. Validity/invalidity of voluntary recognition 7. Opposition to application for union or CBA registration 8. Violations of or disagreements over any provision of the constitution and by‐laws of union or workers’ association 9. Disagreements over chartering or registration of labor organizations or the registration of CBAs; 10. Violations of the rights and conditions of membership in a union or workers’ association; 11. Violations of the rights of legitimate labor organizations (LLO), except interpretation of CBAs; 12. Validity/invalidity of impeachment/ expulsion/suspension or any disciplinary action meted against any officer and member, including those arising from


PROCEDURE AND JURISDICTION non‐compliance with the reportorial requirements under Rule V; 13. Such other disputes or conflicts involving the rights to self‐organization, union membership and CB – a. Between and among LLO and b. Between and among members of a union or workers’ association. (Sec.1, Rule XI, Book V, IRR as amended by D.O. 40‐F‐03) Q: What is covered by the phrase “other related labor relations disputes”? A: 1. Any conflict between: a. A labor union and the employer (Er); or b. A labor union and a group that is not a labor organization (LO); or c. A labor union and an individual who is not a member of such union 2. Cancellation of registration of unions and worker’s associations filed by individual/s other than its members, or group that is not a LO. 3. A petition for Interpleader involving labor relations. (Sec. 2, Rule XI, Book V, IRR as amended by D.O. 40‐F‐03) Q: Who may file a complaint or petition involving intra/inter‐union disputes? A: A legitimate labor organization or its members. (Sec. 5, Rule XI, D.O. 40‐03) Q: What if the issue involves the entire membership? A: The complaint must be signed by at least 30% of the entire membership of the union. Q: What if the issue involves a member only? A: Only the affected member may file the complaint. (Sec. 5, Rule XI, D.O. 40‐03) Note: GR: Redress must first be sought within the union itself in accordance with its constitution and by‐ laws XPNs: 1. Futility of intra‐union remedies; 2. Improper expulsion procedure; 3. Undue delay in appeal as to constitute substantial injustice; 4. The action is for damages;

5.

6. 7. 8.

Lack of jurisdiction of the investigating body; action for the administrative agency is patently illegal, arbitrary and oppressive; Issue is purely a question of law; Where the administrative agency had already prejudged the case; and Where the administrative agency was practically given the opportunity to act on the case but it did not.

Q: May a decision in an inter/intra‐union dispute be appealed from? A: Yes. Q: Within what period may an appeal to a decision of the med‐arbiter or regional director in an inter/intra‐union dispute be filed? A: The decision may be appealed by any of the parties within 10 days from receipt thereof. (Sec. 16, Rule XI, D.O. 40‐03) Q: To whom is the decision appealable? A: The decision is appealable to the: 1. Bureau of Labor Relations (BLR): if the case originated from the Med‐Arbiter or Regional Director; 2. SLE: if the case originated from the BLR. Q: What is the extent of the Bureau of Labor Relations (BLRs) authority? A: 1. It may hold a referendum election among the members of a union for the purpose of determining whether or not they desire to be affiliated with a federation. 2. But the BLR has no authority to: a. Order a referendum among union members to decide whether to expel or suspend union officers. b. Forward a case to the Trade Union Congress of the Philippines for arbitration and decision. Q: Is Katarungang Pambarangay applicable to labor disputes? A: No. Art. 226 of the LC grants original and exclusive jurisdiction over the conciliation and mediation of disputes grievances or problems in the regional offices of the DOLE. It is the Bureau and its divisions (now the NCMB) and not the Barangay Lupong Tagapamayapa which are vested by law with original and exclusive authority to conduct

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UST GOLDEN NOTES 2011 conciliation and mediation proceedings on labor controversies before endorsement to the appropriate labor arbiter for adjudication.

3.

Note: Conciliation‐Mediation is now done by the NCMB, not Bureau Labor Relations.

Q: What are the administrative functions of the Bureau Labor Relations (BLR)? A: 1. Regulation of the labor unions 2. Keeping the registry of labor unions 3. Maintenance of a file of the CBA 4. Maintenance of a file of all settlements or final decisions of the SC, CA, NLRC and other agencies on labor disputes Q: What are the effects of filing or pendency of inter/intra‐union dispute and other labor relations disputes? A: 1. The rights relationships and obligations of the party‐litigants against each other and other parties‐in‐interest prior to the institution of the petition shall continue to remain during the pendency of the petition and until the date of the decision rendered therein. Thereafter, the rights, relationships and obligations of the party‐ litigants against each other and other parties‐in‐interest shall be governed by the decision ordered. 2. The filing or pendency of any inter/intra union disputes is not a prejudicial question to any petition for certification election, hence it shall not be a ground for the dismissal of a petition for certification of election or suspension of the proceedings for the certification of election. (Sec. 3, Rule XI, DO 40‐03) Q: State the rules on appeal in intra/inter‐union disputes. A: 1. Formal Requirements a. Under oath b. Consist of a memorandum of appeal. c. Based on either of the following grounds: i. Grave abuse of discretion ii. Gross violation of the rules iii. With supporting arguments and evidence 2. Period ‐ within 10 days from receipt of decision.

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4.

To whom appealable a. BLR – if the case originated from the Med‐Arbiter/Regional Director. b. SLE – if the case originated from the BLR. Where Filed ‐ Regional Office or to the BLR, where the complaint originated (records are transmitted to the BLR or Sec. within 24 hours from the receipt of the memorandum of appeal). (Rule XI, D.O. 40‐03)

4.NATIONAL CONCILIATION AND MEDIAITON BOARD (NCMB) Q: What are the alternative modes of settlement of labor dispute under Art. 211 of the Labor Code? A: 1. Voluntary Arbitration 2. Conciliation 3. Mediation a.Conciliation vs. Mediation Q: What is Conciliaton and Mediation? A: CONCILIATION Is conceived of as a mild form of intervention by a neutral third party The conciliator‐ Mediator, relying on his persuasive expertise, who takes an active role in assisting parties by trying to keep disputants talking, facilitating other procedural niceties, carrying messages back and forth between the parties, and generally being a good fellow who tries to keep things calm and forward‐looking in a tense situation It is the process where a disinterested 3rd party meets with management and labor, at their request or otherwise, during a labor dispute or in

MEDIATION Is a mild intervention by a neutral third party The conciliator‐ mediator, whereby he starts advising the parties or offering solutions or alternatives to the problems with the end in view of assisting them towards voluntarily reaching their own mutually acceptable settlement of the dispute

It is when a 3rd party studies each side of the dispute then makes proposals for the disputants to consider. The mediator cannot make an award nor


PROCEDURE AND JURISDICTION collective bargaining conferences, and by cooling tempers, aids in reaching an agreement

render a decision

Conciliation ‐ is conceived of as a mild form of intervention by a neutral third party, the Conciliator‐Mediator, relying on his persuasive expertise, who takes an active role in assisting parties by trying to keep disputants talking, facilitating other procedural niceties, carrying messages back and forth between the parties, and generally being a good fellow who tries to keep things calm and forward‐looking in a tense situation. rd It is the process where a disinterested 3 party meets with management and labor, at their request or otherwise, during a labor dispute or in collective bargaining conferences, and by cooling tempers, aids in reaching an agreement. Mediation ‐ is a mild intervention by a neutral third party, the Conciliator‐Mediator, whereby he starts advising the parties or offering solutions or alternatives to the problems with the end in view of assisting them towards voluntarily reaching their own mutually acceptable settlement of the dispute. rd It is when a 3 party studies each side of the dispute then makes proposals for the disputants to consider. The mediator cannot make an award nor render a decision. Q: What is the Legal Basis of Conciliation and Mediation? A: Article 13, Section 3, of our New Constitution provides: “The State shall promote xxx the preferential use of voluntary modes of setting disputes including conciliation and shall ensure mutual compliance by the parties thereof in order to foster industrial peace.” Note: A similar provision is echoed in the Declaration of Policy under Article 211 (a) of the Labor Code, as amended.

Q: Who can avail of Conciliation and Mediation Services of the NCMB? A: Any party to a labor dispute, either the union or management, may seek the assistance of NCMB or any of its Regional Branches by means of formal request for conciliation and preventive mediation. Depending on the nature

of the problem, a request may be filed in the form of consultation, notice of preventive mediation or notice of strike/lockout. Q: Where can a request for Conciliation and Mediation be filed? A: An informal or formal request for conciliation and mediation service can be filed at the NCMB Central Office or any of its Regional Branches. There are at present fourteen (14) regional offices of the NCMB which are strategically located all over the country for the convenient use of prospective clients. b.Preventive Mediation Q: What is Preventive Mediation Cases? A: Refer to the potential labor disputes which are the subject of a formal or informal request for conciliation and mediation assistance sought by either or both parties or upon the initiative of the NCMB to avoid the occurrence of actual labor disputes. Q: What are the valid issues for a notice of strike / lockout or preventive mediation case? A: A notice of strike or lockout maybe filed on ground of unfair labor practice acts, gross violation of the CBA, or deadlock in collective bargaining. A complaint on any of the above ground must be specified in the NCMB Form or the proper form used in the filing of complaint. In case of preventive mediation, any issue may be brought before the NCMB Central Office or its regional offices for conciliation and possible settlement through a letter. This method is more preferable than a notice of strike/lockout because of the non‐adversarial atmosphere that pervades during the conciliation conferences. Q: What advantage can be derived from conciliation and mediation services? A: Conciliation and mediation is non‐ litigious/non‐adversarial, less expensive, and expeditious. Under this informal set‐up, the parties find it more expedient to fully ventilate their respective positions without running around with legal technicalities and, in the course thereof, afford them a wider latitude of possible approaches to the problem. Q: Are the parties bound by the agreement entered into by them?

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UST GOLDEN NOTES 2011 A: Certainly, the parties are bound to honor any agreement entered into by them. It must be pointed out that such an agreement came into existence as a result of painstaking efforts among the union, management, and the Conciliator‐ Mediator. Therefore, it is only logical to assume that the Conciliator assigned to the case has to follow up and monitor the implementation of the agreement. Q: Is conciliation and mediation service still possible during actual strike or lockout? A: Definitely, it is possible to subject an actual strike or actual lockout to continuing conciliation and mediation services. In fact, it is at this critical stage that such conciliation and mediation services by fully given a chance to work out possible solution to the labor dispute. With the ability of the Conciliator‐Mediator to put the parties at ease and place them at a cooperative mood, the final solutions of all the issues involved may yet be effected and settled. Q: When the dispute has already been assumed or certified to the NLRC, is it also possible to remand the same to conciliation and mediation services? A: Yes, the parties are not precluded from availing the services of an NCMB Conciliator‐ Mediator as the duty to bargain collectively subsists until the final resolution of all issues involved in the dispute. Conciliation is so pervasive in application that, prior to a compulsory arbitration award, the parties are encouraged to continue to exhaust all possible avenues of mutually resolving their dispute, especially through conciliation and mediation services. Q: What benefit can the parties have in appearing during conciliation conferences? A: Generally speaking, any party appearing during scheduled conciliation conferences has the advantage of presenting its position on the labor controversy. The issue raised in the complaint can be better ventilated with the presence of the concerned parties. Moreover, the parties can observe a norm of conduct usually followed in like forum. c.Artbitration Q: What is arbitration?

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A: It is the submission of a dispute to an impartial person for determination on the basis of evidence and arguments of the parties. The arbiter’s decision or award is enforceable upon the disputants. It may be voluntary (by agreement) or compulsory (required by statutory provision). (Luzon Dev’t Bank v. Ass’n of Luzon Dev’t Bank Employees, G.R. No. 120319, Oct. 6, 1995) Q: Can the court fix resort to voluntary arbitration (VA)? A: Resort to VA dispute, should not be fixed by the court but by the parties relying on their strengths and resources. Q: Who are the parties to labor relations cases? A: 1. Employees organization 2. Management 3. The public Note: Employer and Ees are active parties while the public and the State are passive parties. (Poquiz, 2006, p.3)

Q: What is the concept of tripartism? A: It is the representation of 3 sectors. These are: 1. The public or the government 2. The employers 3. The workers – in policy‐making bodies of the gov’t. Q: Can workers insist that they be represented in the policy making in the company? A: No. Such kind of representation in the policy‐ making bodies of private enterprises is not ordained, not even by the Constitution. What is provided for is workers participation in policy and decision‐making process directly affecting their rights, benefits, and welfare. 5.DOLE REGIONAL DIRECTORS a.Small Money Claims Q: What is the rule on the recovery of simple money claims? A: 1. The aggregate money claim of each employee (Ee) or househelper (HH) does not exceed P5,000. 2. The claim is presented by an Ee or person employed in the domestic or household service or HH.


PROCEDURE AND JURISDICTION 3. 4.

The claim arises from Er‐Ee relationship. The claimant does not seek reinstatement.

Note: In the absence of any of the ff. requisites, it is the labor arbiter (LA) who shall have the jurisdiction over the claims arising from Er‐Ee relations, except claims for Ees compensation, SSS, Philhealth, and maternity benefits, pursuant to Art.217 of the Labor Code. The proceedings before the Regional Office shall be summary and non‐litigious in nature.

Q: What is the adjudicatory power of the Regional Director (RD)? A: The RD or any of his duly authorized hearing officer is empowered through summary proceeding and after due notice, to hear and decide cases involving recovery of wages and other monetary claims and benefits, including legal interests. Q: An airline which flies both the international and domestic routes requested the SLE to approve the policy that all female flight attendants upon reaching age 40 with at least 15 years of service shall be compulsorily retired; however, flight attendants who have reached age 40 but have not worked for 15 years will be allowed to continue working in order to qualify for retirement benefits, but in no case will the extension exceed 4 years. Does the SLE have the authority to approve the policy? A: Yes. Art.132 (d) of the Labor Code provides that the SLE shall establish standards that will ensure the safety and health of women employees including the authority to determine appropriate minimum age and other standards for retirement or termination in special occupations such as those of flight attendants and the like. (1998 Bar Question) Q: What is the difference between the power of Secretary of Labor and Employment (SLE), Regional Director (RD) and Labor Arbiter (LA)? A: Art. 128 VP and EP of SLE Inspection of establishments and issuance of orders to compel compliance with labor standards, wage orders

Art. 129 RD

Art. 217(a)(6) LA

Adjudication of Ees claims for wages and benefits

LA exercises original and exclusive jurisdiction

and other labor laws

Enforcement of labor legislation in general

Limited to monetary claims

All other claims arising from Er‐ Ee relations

Proceeding is an offshoot of routine inspections

Initiated by sworn complaints filed by any interested party

No jurisdictional req’ts

Jurisdictional req’ts: 1) Complaint arises from Er‐Ee relationship 2) Claimant is an Ee or person employed in domestic or household service or a HH 3) Complaint does NOT include a claim for reinstatement 4) Aggregate money claim of EACH claimant does not exceed P5,000

LA decides case within 30 calendar days after submission of the case by the parties for decision 1) All other claims arising from Er‐Ee relations 2) Including those of persons in domestic or household service 3) Involving an amount exceeding P5,000 4) Whether or not accompanied with a claim for reinstatement

Appealable to SLE (In case compliance order is issued by Regional Office)

Appealable to NLRC

Appealable to NLRC

6.DOLE SECRETARY a.Visitorial and Enforcement Powers Q: What are the 3 kinds of powers of the Secretary of Labor and Employment (SLE)? A: 1. Visitorial powers 2. Enforcement powers 3. Appellate or power to review Q: What constitute visitorial power?

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UST GOLDEN NOTES 2011 A:

4.

1.

2. 3.

Access to employer’s records and premises at any time of the day or night, whenever work is being undertaken To copy from said records Question any employee and investigate any fact, condition or matter which may be necessary to determine violations or which may aid in the enforcement of the Labor Code and of any labor law, wage order, or rules and regulation issued pursuant thereto.

Q: Give 4 instances where the visitorial power of the SLE may be exercised under the Labor Code. A: Power to: 1. Inspect books of accounts and records of any person or entity engaged in recruitment and placement, require it to submit reports regularly on prescribed forms and act in violations of any provisions of the LC on recruitment and placement. (Art. 37) 2. Have access to employer’s records and premises to determine violations of any provisions of the LC on recruitment and placement. (Art. 128) 3. Conduct industrial safety inspections of establishments. (Art. 165) 4. Inquire into the financial activities of legitimate labor organizations (LLO) and examine their books of accounts upon the filing of the complaint under oath and duly supported by the written consent of at least 20% of the total membership of the LO concerned. Q: What is enforcement power? A: It is the power of the SLE to: 1. Issue compliance orders 2. Issue writs of execution for the enforcement of their orders, except in cases where the employer (Er) contests the findings of the labor officer and raise issues supported by documentary proof which were not considered in the course of inspection 3. Order stoppage of work or suspension of operation when non‐compliance with the law or implementing rules and regulations poses grave and imminent danger to health and safety of workers in the workplace

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Require Ers to keep and maintain such employment records as may be necessary in aid to the visitorial and enforcement powers 5. Conduct hearings within 24 hours to determine whether: a. An order for stoppage of work or suspension of operations shall be lifted or not; and b. Er shall pay employees concerned their salaries in case the violation is attributable to his fault. (As amended by RA 7730; Guico v. Secretary, G.R. No. 131750, Nov.16, 1998) Q: What are the violations under Art. 128? A: 1. Obstruct, impede, delay or otherwise render ineffective the orders of the SLE or his authorized representatives 2. Any government employee found guilty of, or abuse of authority, shall be subject to administrative investigation and summary dismissal from service. Q: What are the limitations to other courts? A: In relation to enforcement orders issued under Art. 128, no inferior court or entity shall: 1. Issue temporary or permanent injunction or restraining order or 2. Assume jurisdiction over any case Q: What are the instances when enforcement power may not be used? A: 1. Case does not arise from the exercise of visitorial power 2. When Er‐Ee relationship ceased to exist at the time of the inspection 3. If employer contests the finding of the Labor Regulation Officer and such contestable issue is not verifiable in the normal course of inspection b.Power to Suspend Effects of Termination‐Art. 277 (b), LC Q: Does the DOLE Secretary have the power to suspend the effects of termination? A: Yes, under Article 277 (b) of the Labor Code, the Secretary of Labor may suspend the effects of the termination pending resolution of the dispute in the event of a prima facie finding by the appropriate


PROCEDURE AND JURISDICTION official of the Department of Labor and Employment before whom such dispute is pending that the termination may cause serious labor dispute or is in implementation of a mass layoff. 7.VOLUNTARY ARBITRATORS a.Submission Agreement Q: How is arbitration initiated? A: 1. Submission agreement – Where the parties define the disputes to be resolved 2. Demand notice – Invoking collective agreement arbitration clause Q: Who is a voluntary arbitrator (VA)? A: 1. Any person accredited by the NCMB as such 2. Any person named or designated in the CBA by the parties to act as their VA 3. One chosen with or without the assistance of the NCMB, pursuant to a selection procedure agreed upon in the CBA 4. Any official that may be authorized by the SLE to act as VA upon the written request and agreement of the parties to a labor dispute. (Art. 212 [n]) Q: What are the powers of a voluntary arbitrator? A: 1. Hold hearings 2. Receive evidence 3. Take whatever action necessary to resolve the dispute including efforts to effect a voluntary settlement between parties. (Art. 262‐A) Q: How is a voluntary arbitrator (VA)/panel chosen? A: 1. The parties in a CBA shall designate in advance a VA/panel, preferably from the listing of qualified VAs duly accredited by the NCMB, or 2. Include in the agreement a procedure for the selection of such VA or panel of VAs, preferably from the listing of qualified VAs duly accredited by the NCMB. (Art.260, par.3)

Q: Who will designate the voluntary arbitrator (VA)/panel in case the parties fail to select one? A: It is the NCMB that shall designate the VA/panel based on the selection procedure provided by the CBA. (Manila Central Line Free Workers Union v. Manila Central Line Corp., G.R. No. 109383, June 15, 1998) Q: May Labor Arbiters (LA) be designated as voluntary arbitrators (VA)? A: Yes. There is nothing in the law that prohibits LAs from also acting as VAs as long as the parties agree to have him hear and decide their dispute. (Manila Central Line Free Workers Union v. Manila Central Line Corp., G.R. No. 109383, June 15, 1998) Q: What falls under the jurisdiction of Voluntary Arbitrators (VA)? A: Generally, the arbitrator is expected to decide only those questions expressly delineated by the submission agreement. Nevertheless, the arbitrator can assume that he has the necessary power to make a final settlement since arbitration is the final resort for the adjudication of the disputes. (Ludo and Luym Corp. v. Saornido, G.R. No. 140960, Jan. 20, 2003) Q: What cases are within the jurisdiction of VA? A: Original and exclusive jurisdiction over: 1. All unresolved grievances arising from the: a. Implementation or interpretation of the CBA b. Interpretation or enforcement of company personnel policies 2. Wage distortion issues arising from the application of any wage orders in organized establishments 3. Those arising from interpretation and implementation of productivity incentive programs under R.A. 6971 4. Violations of CBA provisions which are not gross in character are no longer treated as ULP and shall be resolved as grievances under the CBA Note: Gross violation of CBA provisions shall mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement.

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Any other labor disputes upon agreement by the parties including ULP and bargaining deadlock. (Art. 262)

Q: May the NLRC and DOLE entertain disputes/grievances/matters under the exclusive and original jurisdiction of the voluntary arbitrator? A: No. They must immediately dispose and refer the same to the grievance machinery or voluntary arbitration provided in the CBA The parties may choose to submit the dispute to voluntary arbitration proceedings before or at the stage of compulsory arbitration proceedings. Q: What is the effect of the award of voluntary arbitrator (VA)? A: The decision or award of the VA acting within the scope of its authority shall determine the rights of the parties and their decisions shall have the same legal effects as judgment of the courts. Such matters on fact and law are conclusive. Q: Are both the employer and the bargaining representative of the employees required to go through the grievance machinery in case a grievance arises? A: Yes, because it is but logical, just and equitable that whoever is aggrieved should initiate settlement of grievance through the grievance machinery. To impose compulsory procedure on employers alone would be oppressive of capital. Q: Who has jurisdiction over actual termination disputes and complaints for illegal dismissal filed by workers pursuant to the union security clause? A: The Labor Arbiter and not the grievance machinery. Q: What is the nature of the power of a voluntary arbitrator? A: Arbitrators by the nature of their functions, act in a quasi‐judicial capacity (BP 129, as amended by R.A. 9702); where a question of law is involved or there is abuse of discretion, courts will not hesitate to pass upon review of their acts. b.Rule 43, Rules of Court Q: Are decisions of voluntary arbitrators (VAs) appealable?

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A: GR: Decisions of VA are final and executory after 10 calendar days from receipt of the copy of the award or decision by the parties. (Art. 262‐A) XPNs: 1. Appeal to the CA via Rule 43 of the Rules of Court within 15 days from the date of receipt of VA’s decision. (Luzon Dev’t Bank v. Ass’n of Luzon Dev’t Bank Ee’s, G.R. No. 120319, Oct. 6, 1995) 2. If decision of CA is adverse to a party, appeal to the SC via Rule 45 on pure questions of law. Note: A VA by the nature of her functions acts in quasi‐ judicial capacity. There is no reason why the VA’s decisions involving interpretation of law should be beyond the SC’s review. Administrative officials are presumed to act in accordance with law and yet the SC will not hesitate to pass upon their work where a question of law is involved or where a showing of abuse of authority or discretion in their official acts is properly raised in petitions for certiorari. (Continental Marble Corporation v. NLRC, G.R. No. L‐43825, May 9, 1988)

Q: PSSLU had an existing CBA with Sanyo Phils., Inc. which contains a union security clause which provides that: “all members of the union covered by this agreement must retain their membership in good standing in the union as condition of his / her continued employment with the company.” On account of anti‐union activities, disloyalty and for joining another union, PSSLU expelled 12 employees (Ees) from the Union. As a result, PSSLU recommended the dismissal of said Ees pursuant to the union security clause. Sanyo approved the recommendation and considered the said Ees dismissed. Thereafter, the dismissed Ees filed with the Arbitration Branch of the NLRC a complaint for illegal dismissal. Does the voluntary arbitrator (VA) have jurisdiction over the case? A: No, the VA has no jurisdiction over the case. Although the dismissal of the Ees concerned was made pursuant to the union security clause provided in the CBA, there was no dispute whatsoever between PSSLU and Sanyo as regards the interpretation or implementation of the said union security clause. Both PSSLU and Sanyo are united and have come to an agreement regarding the dismissal of the Ees concerned. Thus there is no grievance between the union and management which could be brought to the grievance machinery. The dispute is between PSSLU and Sanyo, on the one hand, and the dismissed union members, on the other hand. The dispute therefore, does not


PROCEDURE AND JURISDICTION involve the interpretation or implementation of a CBA. (Sanyo Philippines Workers Union‐PSSLU v. Canizares, G.R. No. 101619, July 8, 1992) Q: X was employed as telephone operator of Manila Midtown Hotel. She was dismissed from her employment for committing the following violations of offenses subject to disciplinary actions, namely: falsifying official documents and culpable carelessness‐negligence or failure to follow specific instructions or established procedures. X then filed a complaint for illegal dismissal with the Arbitration branch of the NLRC. The Hotel challenged the jurisdiction of the Labor Arbitrator (LA) on the ground that the case falls within the jurisdictional ambit of the grievance procedure and voluntary arbitration under the CBA. Does the LA have jurisdiction over the case? A: Yes, the LA has jurisdiction. The dismissal of X does not call for the interpretation or enforcement of company personnel policies but is a termination dispute which comes under the jurisdiction of the LA. The dismissal of X is not an unresolved grievance. Neither does it pertain to interpretation of company personnel policy. (Maneja v. NLRC, G.R. No. 124013, June 5, 1998) Q: Sime Darby Salaried Employees (Ees) Association‐ALU (SDSEA‐ALU) wrote petitioner Sime Darby Pilipinas (SDP) demanding the implementation of a performance bonus provision identical to the one contained in their own CBA with SDP. Subsequently, SDP called both respondent SDEA and SDEA‐ALU to a meeting wherein the former explained that it was unable to grant the performance bonus. In a conciliation meeting, both parties agreed to submit their dispute to voluntary arbitration. Their agreement to arbitrate stated, among other things, that they were "submitting the issue of performance bonus to voluntary arbitration." Does the voluntary arbitrator (VA) have the power to pass upon not only the question of whether to grant the performance bonus or not but also to determine the amount thereof? A: Yes, in their agreement to arbitrate, the parties submitted to the VA “the issue of performance bonus.” The language of the agreement to arbitrate may be seen to be quite cryptic. There is no indication at all that the parties to the arbitration agreement regarded “the issue of performance bonus” as a two‐tiered issue, only one tier of which was being submitted to arbitration. Possibly, Sime

Darby’s counsel considered that issue as having dual aspects and intended in his own mind to submit only one of those aspects to the VA, if he did, however, he failed to reflect his thinking and intent in the arbitration agreement. (Sime Darby Phils. v. Magsalin, G.R. No. 90426, Dec. 15, 1989) Q: Apalisok, production chief for RPN Station, was dismissed due to her alleged hostile, arrogant, disrespectful, and defiant behavior towards the Station Manager. She informed RPN that she is waiving her right to resolve her case through the grievance machinery as provided in the CBA. The voluntary arbitrator (VA) resolved the case in the employees (Ees) favor. On appeal, the CA ruled in favor of RPN because it considered the waiver of petitioner to file her complaint before the grievance machinery as a relinquishment of her right to avail herself of the aid of the VA. The CA said that the waiver had the effect of resolving an otherwise unresolved grievance, thus the decision of the VA should be set aside for lack of jurisdiction. Is the ruling of the CA correct? A: No. Art. 262 of the Labor Code provides that upon agreement of the parties, the VA can hear and decide all other labor disputes. Contrary to the finding of the CA, voluntary arbitration as a mode of settling the dispute was not forced upon respondents. Both parties indeed agreed to submit the issue of validity of the dismissal of petitioner to the jurisdiction of the VA by the Submission Agreement duly signed by their respective counsels. The VA had jurisdiction over the parties’ controversy. The Ees waiver of her option to submit her case to grievance machinery did not amount to relinquishing her right to avail herself of voluntary arbitration. (Apalisok v. RPN, G.R. No. 138094, May 29, 2003) 8.COURT OF APPEALS Q: Is judicial review of the NLRC’s decision available? A: Yes, through petitions for certiorari (Rule 65) which should be initially filed with the CA in strict observance of the doctrine on the hierarchy of courts as the appropriate forum for the relief desired. The CA is procedurally equipped to resolve unclear or ambiguous factual finding, aside from the increased number of its component divisions.

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UST GOLDEN NOTES 2011 (St. Martin Funeral Home v. NLRC, G.R. No. 130866, Sep. 16, 1998) Note: Rule 65, Section 1, Rules of Court Petition for Certiorari‐‐When any tribunal, board or officer exercising judicial or quasi‐judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require. The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non‐forum shopping as provided in the third paragraph of section 3, Rule 46.

Q: Within what period should the petition for certiorari be filed with the Court of Appeals? A: Under Section 4, Rule 65 (as amended by A.M. No. 00‐2‐03‐SC) of the Rules of Civil Procedure, the petition must be filed within sixty (60) days from notice of the judgment or from notice of the resolution denying the petitioner’s motion for reconsideration. This amendment is effective September 1, 2000, but being curative may be given retroactive application. (Narzoles v. NLRC, G.R. No. 141959, Sep. 29, 2000) The period within which a petition for certiorari against a decision of the NLRC may be filed should be computed from the date counsel of record of the party receives a copy of the decision or resolution, and not from the date the party himself receives a copy thereof. Article 224 of the Labor Code, which requires that copies of final decisions, orders or awards be furnished not only the party’s counsel of record but also the party himself applies to the execution thereof and not to the filing of an appeal or petition for certiorari. (Ginete v. Sunrise Manning Agency, G.R. No. 142023, June 21, 2001) 9.SUPREME COURT Q: How does a party appeal from a judgment, or final order or resolution, of the Court of Appeals? A: A party desiring to appeal may file with the Supreme Court a verified petition for review on certiorari under Rule 45 within fifteen (15) days from notice of the judgment, final order or

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resolution appealed from. (Sea Power Shipping Enterprises, Inc. v. CA, G.R. No. 138270, June 28, 2001) Note: Rule 45, Section 1, Rules of Court: Filing of petition with Supreme Court.—A party desiring to appeal by certiorari from a judgment, final order or resolution of the Court of Appeals, the Sandiganbayan, the Court of Tax Appeals, the Regional Trial Court or other courts, whenever authorized by law, may file with the Supreme Court a verified petition for review on certiorari. The petition may include an application for a writ of preliminary injunction or other provisional remedies and shall raise only questions of law, which must be distinctly set forth. The petitioner may seek the same provisional remedies by verified motion filed in the same action or proceeding at any time during its pendency.

Q: Give the policy of the Supreme Court regarding appeals in labor cases. A: The Supreme Court is very strict regarding appeals filed outside the reglementary period for filing the same. To extend the period of the appeal is to delay the case, a circumstance which could give the employer the chance to wear out the efforts and meager resources of the worker that the latter is constrained to give up for less than what is due him. (Firestone Tire and Rubber Co. of the Philippines v. FirestoneTire and Rubber Co. Employees Union, G.R. No. 75363, Aug. 4, 1992) 10.PRESCRIPTION OF ACTIONS Q: Give the rules as regards the prescriptive period provided for in the Labor Code (LC). A: SUBJECT Offenses penalized under the LC ULP

Money Claims

All money claims accruing prior to the effectivity of the LC Workmen’s Compensation claims accruing prior to the

PRESCRIPTIVE PERIOD 3 years One (1) year from accrual of such ULP; otherwise forever barred (Art. 290) 3 years from the time the cause of action accrued; otherwise forever barred Within one (1) year from the date of effectivity, in accordance with IRR; otherwise, they shall forever be barred Dec. 31, 1974 shall be filed not later than Mar. 31, 1975 before the


PROCEDURE AND JURISDICTION effectivity of the LC and between Nov. 1, 1974‐ Dec. 31, 1974

Illegal Dismissal Cases

appropriate regional offices of the Department of Labor. (Art. 291) 4 years. It commences to run from the date of formal dismissal. (Mendoza v. NLRC, G.R. No. 122481, Mar. 5, 1998)

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UST GN 2011 - Labor Law Proper

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